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Thursday 22 February 2018
South Florida Doctor Sentenced in Medicare Fraud SchemeRead the Press Release
Dr. Salomon Melgen was sentenced today to 17 years in prison, to be followed by three years of supervised release by the U.S. District Judge Kenneth A. Marra in West Palm Beach, Florida. This sentencing is the culmination of a multi-year investigation, which was followed by an eight week jury trial in April 2017 that resulted in Melgen’s conviction on 67 counts of health care fraud and related charges.
Benjamin G. Greenberg, United States Attorney for the Southern District of Florida; Robert F. Lasky, Special Agent in Charge, Federal Bureau of Investigations (FBI), Miami Field Office; Shimon R. Richmond, Special Agent in Charge, U.S. Department of Health and Human Services, Office of the Inspector General (HHS-OIG); Patrick Fletcher, Special Agent in Charge, U.S. Railroad Retirement Board, Office of Inspector General (RRB-OIG); and John F. Khin, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), made the announcement.
Melgen, an ophthalmologist who specialized in the treatment of retinal disorders and who had practiced in Palm Beach and St. Lucie Counties for many years until his arrest in 2015, engaged in a scheme to defraud the Medicare program and other health care benefit programs, by, among other things, falsely diagnosing Medicare patients with macular degeneration and then performing and billing for excessive and medically unnecessary tests and procedures, which included injections of expensive drugs and laser treatments. These tests and procedures resulted in Melgen’s receiving tens of millions of dollars in reimbursement from the Medicare program alone during the six-year period of January 2008 through December 2013.
In sentencing Melgen, Judge Marra found that the intended fraud loss was over $70 million and the actual fraud loss to Medicare was $42 million. In addition to the term of incarceration, the defendant was ordered to make full restitution to Medicare. Losses to other insurance companies and to individual patients will be determined at a future hearing.
“In perpetrating his multi-million fraud scheme on health care benefit programs like Medicare, Dr. Melgen showed complete disregard for what was best for his patients and abused their trust for his own personal financial gain,” stated U.S. Attorney Benjamin G. Greenberg. “Dr. Melgen has been held responsible for his egregious fraud scheme. Today’s sentence should serve as a reminder that the U.S. Attorney’s Office and our law enforcement partners remain committed to bringing those who illegally divert the community’s tax dollars to justice, regardless of their professional position.”
“The reprehensible conduct of Salomon Melgen is a disgrace to the medical profession,” said Robert F. Lasky, Special Agent in Charge, FBI Miami. “Not satisfied with being a successful ophthalmologist committed to treating his patients’ legitimate medical conditions, Melgen devised a scheme to enrich himself by defrauding Medicare and other benefit programs to the tune of tens of millions of dollars. The FBI will not relent in its pursuit of Medicare fraudsters – including greedy doctors.”
“Salomon Melgen callously took advantage of patients who came to him fearing blindness,” said Shimon Richmond, Special Agent in Charge of the U.S. DHHS Office of Inspector General’s Miami Region. “Instead of treatment, they received medically unreasonable and unnecessary tests and procedures that victimized his patients and the American taxpayer. Today’s sentencing is a stark reminder that the OIG and our partners will not tolerate Medicare fraud and will not rest in our efforts to protect patients in their time of need.”
“The U.S. Railroad Retirement Board, Office of Inspector General is committed to fighting Medicare fraud, waste and abuse and is proud to be part of this collaborative effort with the FBI, HHS-OIG, DCIS-OIG and OPM-OIG,” said Inspector General Martin J. Dickman. “The sentencing of Dr. Melgen sends a loud and clear message that combating Medicare fraud is a top Federal law enforcement priority and unscrupulous Medicare providers will not be tolerated.”
“This sentencing demonstrates the effectiveness of our joint investigations to pursue corrupt health care providers who defraud Federal health care programs,” stated Defense Criminal Investigative Service (DCIS) Special Agent in Charge John F. Khin, Southeast Field Office. “DCIS is committed to preserving the integrity of DoD’s TRICARE program which serves America's Warfighters and their families.”
Mr. Greenberg commended the investigative efforts of the FBI, HHS-OIG, RRB-OIG and DCIS. This case was prosecuted by Assistant United States Attorneys Roger H. Stefin, Carolyn Bell and Alexandra Chase.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Six More Defendants Indicted in Multi-Agency Investigation into Coordinated Criminal Activity Centered in WoodlandRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned five indictments today against six additional defendants arrested as part of last week’s multi-agency coordinated series of searches and arrests throughout Northern California, U.S. Attorney McGregor W. Scott announced.
- Daisy Gonzalez, 32, of Termo in Lassen County, and Jose Trinidad Heredia Romero, a Mexican national, are charged with conspiracy to manufacture marijuana, the manufacture of marijuana, and possession with intent to distribute methamphetamine. Gonzalez is also charged with unlawful possession of a firearm.
- Asencion Jimenez, 38, of North Highlands, is charged with being a felon in possession of firearms.
- Stefanie Lavan, 65, Woodland, is charged with possession with intent to distribute methamphetamine.
- John Lemus, 31, of Woodland, is charged with being a felon in possession of a firearm;
- Carlos Martinez, 38, of Woodland, is charged with unlawful possession of a firearm, possession with intent to distribute cocaine, and possession of a firearm during and in furtherance of a drug-trafficking offense.
These new indictments arise from a multi-agency law enforcement investigation focused on Woodland, but which spread to multiple counties in Northern California and to two additional states. For more information, go to the website for the Eastern District of California.
If convicted, the defendants face statutory penalties of five to 40 years in prison for conspiracy to manufacture marijuana or the manufacture of marijuana and up to a $5 million fine; 10 years to life and up to a $10 million fine for possession with intent to distribute methamphetamine; up to 10 years in prison and a $250,000 fine for being a prohibited person in possession of a firearm; up to 20 years in prison and a $1 million fine for possession with intent to distribute cocaine, and up to five years in prison and a $250,000 fine for possession of firearms during and in furtherance of a drug trafficking crime. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case is part of an Organized Crime Drug Enforcement Task Force (OCDETF). The OCDETF program was established in 1982 to conduct comprehensive, multilevel attacks on major drug trafficking and money laundering organizations. The principal mission of the OCDETF program is to identify, disrupt, and dismantle the most serious drug trafficking and money laundering organizations and those primarily responsible for the nation’s drug supply.
This case is brought as part of Project Safe Neighborhoods (PSN), an initiative that brings together federal, state and local law enforcement to combat gun and gang crime. At the core of PSN is increased federal prosecution to incapacitate chronic violent offenders as well as to communicate a credible deterrent threat to potential gun offenders.
These cases, and others unveiled in six indictments last week, are the product of an investigation by the FBI, California Department of Corrections and Rehabilitation (CDCR), Yolo County District Attorney, Woodland Police Department, and the California Highway Patrol. The following agencies provided substantial assistance: Colusa County Sheriff’s Office, Sacramento Police Department, Sacramento County Sheriff’s Office, West Sacramento Police Department, Yolo County Sheriff’s Office, Davis Police Department, Yuba City Police Department, Yuba County Sheriff’s Office, Sutter County Sheriff’s Office, Solano County Sheriff’s Office, Vacaville Police Department, the Correctional Intelligence Task Force (CITF), Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Postal Inspection Service, and the Drug Enforcement Administration (DEA). Assistant U.S. Attorneys Owen Roth and Justin L. Lee are prosecuting the cases.Shreveport felon pleads guilty to illegally possessing a firearm, parked at apartment complexRead the Press Release
SHREVEPORT, La. – United States Attorney Alexander C. Van Hook announced that a Shreveport man previously convicted of a felony pleaded guilty Wednesday to unlawfully possessing a pistol while parked outside a Shreveport apartment.
Charles M. Thomas, 21, of Shreveport, pleaded guilty before U.S. Magistrate Judge Mark L. Hornsby to one count of felon in possession of a firearm. The plea will become final when accepted by U.S. District Judge S. Maurice Hicks Jr. According to the guilty plea, a Shreveport Police officer observed a vehicle idling in the parking lot of an apartment complex on Quail Creek Road. When the officer approached the vehicle, he observed Thomas, the driver, placing a handgun under his seat. The firearm was loaded with four rounds of .45 caliber ammunition. Thomas had previously been convicted of three counts of aggravated assault with a firearm in 2016.
Thomas faces up to 10 years in prison, three years of supervised release and a $250,000 fine. The court set a sentencing date of May 18, 2018.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safe for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The ATF and Shreveport Police Department conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
Shreveport felon pleads guilty to illegal possession of a firearmRead the Press Release
SHREVEPORT, La. – United States Attorney Alexander C. Van Hook announced that a Shreveport man previously convicted of a felony pleaded guilty last week possessing a .45 caliber pistol.
Jelantis J. Chatman, 22, of Shreveport, pleaded guilty Friday before U.S. Magistrate Judge Mark L. Hornsby to one count of felon in possession of a firearm. According to the guilty plea, law enforcement officers arrested Chatman at his residence on July 12, 2017. During his arrest, officers discovered a Springfield Armory, model: XD45, .45 caliber pistol and ammunition. Chatman was previously convicted of a felony in 2015 and is not allowed to possess a firearm.
Chatman faces up to 10 years in prison, three years of supervised release and a $250,000 fine. The court set a sentencing date of May 16, 2018.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safe for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001.
The ATF and Shreveport Police Department conducted the investigation. Assistant U.S. Attorney Seth D. Reeg is prosecuting the case.
Seven Defendants Indicted, Connected to Two MurdersRead the Press Release
KANSAS CITY, Mo. – Timothy A. Garrison, United States Attorney for the Western District of Missouri, announced today that seven defendants have been indicted on charges related to two murders.
Shawn Burkhalter, also known as “Deuce,” 29, Sharika Hooker, 29, and Autry Hines, also known as “Bud,” 26, all of Kansas City, Mo.; Joslyn Lee, also known as “Bless,” 26, and Nickayla Jones, 22, both of Blue Springs, Mo.; Rachel Ryce, 30, of Raytown, Mo.; and Joshua Nesbitt, also known as “T,” 23, of Crowder, Miss., were charged in a 14-count indictment returned under seal on Wednesday, Feb. 21, 2018. The indictment was unsealed and made public today upon the arrests of Lee and Hooker. The remaining defendants are already in state custody on related charges.
The federal indictment contains four capital counts related to the murders of two individuals.
Murder of Danny Lamont Dean
The indictment alleges that Burkhalter and Nesbitt shot and killed Danny Lamont Dean on Sept. 10, 2015, while robbing him of cocaine. Burkhalter and Nesbitt are charged together in one count of using a firearm to commit murder in relation to a drug-trafficking crime. They allegedly used a Rock River Arms AR-15 5.56-caliber semi-automatic rifle.
Lee is charged with one count of being an accessory after the fact. She allegedly assisted Burkhalter and Nesbitt after the murder in order to hinder and prevent their apprehension, trial and punishment.
Murder of Anthony Dwayne Johnson
The indictment alleges that Nesbitt shot and killed Anthony Dwayne Johnson on Oct. 4, 2015. Burkhalter and Nesbitt are charged together in a second count of using a firearm to commit murder in relation to a drug-trafficking crime; the indictment alleges that the murder occurred while they were robbing marijuana from an apartment. Burkhalter and Nesbitt are also charged in one count of murdering a potential witness; the indictment alleges that the murder occurred in order to prevent the victim’s testimony and to prevent him from communicating with law enforcement. They allegedly used the same AR-15 rifle.
Burkhalter, Nesbitt, Lee, Jones, Hines and Ryce are charged together with participating in a witness and evidence-tampering conspiracy. Their objectives were to kill or at least intimidate and threaten Johnson, the indictment says. Nesbitt, Lee, Jones, Hines and Ryce allegedly stashed the AR-15 rifle at a residence.
Lee, Jones, Hines, Ryce and Hooker are charged together with being accessories after the fact. The indictment alleges that they assisted Burkhalter and Nesbitt by, anmong other things, taking steps to hide or destroy evidence pertaining to the murder. Hooker allegedly assisted Burkhalter and Nesbitt by providing Nesbitt with sanctuary and money after the murder.
Drug-Trafficking Conspiracy
Six of the seven defendants – Burkhalter, Nesbitt, Lee, Jones, Hines and Ryce – are charged with participating in a conspiracy to distribute cocaine and marijuana from 2008 to Feb. 20, 2018.
In addition to the conspiracy, Burkhalter and Nesbitt are charged together with one count of possessing cocaine with the intent to distribute on Sept. 10, 2015.
Burkhalter and Nesbitt are charged together with one count of discharging a firearm in furtherance of a drug-trafficking crime, related to the discharge of the AR-15 rifle in furtherance of the drug-traffficking conspiracy and the possession of cocaine to distribute.
Burkhalter, Nesbitt, Lee, Jones, Hines and Ryce are charged together with possessing marijuana with the intent to distribute on Oct. 4, 2015. The indictment alleges that they intended to sell a quantity of the marijuana they robbed on that date. They are also charged together in one count of discharging a firearm in furtherance of a drug-trafficking crime.
Armed Robbery
Burkhalter and Nesbitt are charged together in one count with robbing a Kansas City, Mo., business on Sept. 8, 2015, and in one count with brandishing a firearm (the same AR-15 rifle) in furtherance of a crime of violence. Burkhalter and Nesbitt are also charged together in one count of being felons in possession of a firearm.
Garrison cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.
This case is being prosecuted by Assistant U.S. Attorneys David Raskin and Adam Caine. It was investigated by the FBI and the Kansas City, Mo., Police Department.
Sarasota Felon Indicted for Possessing More Than Two Tons of ExplosivesRead the Press Release
Tampa, Florida – A federal grand jury has returned an indictment charging Marc Jason Levene (56, Sarasota) with three counts of possessing explosives as a convicted felon, two counts of improper storage of explosive materials, and one count of possessing ammunition as a convicted felon. If convicted, he faces a maximum penalty of 10 years in federal prison for each of the possession counts and up to one year in federal prison for each improper storage count. The indictment also notifies Levene that the United States intends to forfeit approximately 4,362 pounds of quick match and 858 rounds of .22 caliber ammunition, which are alleged to be explosive materials and ammunition involved in the charged offenses.
According to the indictment, Levene stored explosives in an exterior shed at his home and in a storage unit at a commercial storage facility in Sarasota. Last Thursday, law enforcement officers executed search warrants at Levene’s home and storage unit and seized explosives and ammunition.
An indictment is merely a formal charge that a defendant has committed one or more violations of federal criminal law, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Sarasota County Sheriff’s Office, and the Bureau of Fire and Arson Investigations. It will be prosecuted by Assistant United States Attorney Simon Gaugush.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. In October 2017, Attorney General Jeff Sessions announced the reinvigoration of PSN and directed all U.S. Attorneys’ Offices to develop districtwide crime reduction strategies, incorporating the lessons learned since the program’s inception in 2001. In the Middle District of Florida, U.S. Attorney Maria Chapa Lopez coordinates PSN efforts in cooperation with various federal, state, and local law enforcement officials.
San Antonio Man Sentenced to 45 Years in Federal Prison for Production of Child PornographyRead the Press Release
In San Antonio this afternoon, a federal judge sentenced 31-year-old Nicholas Andreas Gonzalez-Malven to 45 years in federal prison for production of child pornography, announced United States Attorney John F. Bash and Federal Bureau of Investigation (FBI) Special Agent in Charge Christopher Combs, San Antonio Division.
In addition to the prison term, Senior United States District Judge David A. Ezra ordered that Gonzalez pay a $3,000 fine and be placed on supervised release for ten years after completing his prison term.
On June 14, 2017, Gonzalez pleaded guilty to two counts of production of child pornography. According to court records, Gonzalez took photographs of a child on two separate occasions in 2016 that depicted sexually explicit conduct. FBI agents recovered the photographs from a phone seized during a separate investigation.
The FBI and the Bexar County Sheriff’s Office conducted this joint investigation. Assistant U.S. Attorney Tracy Thompson prosecuted this case on behalf of the Government.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
San Antonio Man Enters Guilty Plea to Federal Charge in Connection with Shooting of U.S. Mail CarrierRead the Press Release
In San Antonio this afternoon, 23–year-old Bradley Ahearn admitted to shooting a U.S. Mail carrier last year in Spring Branch, TX, announced United States Attorney John F. Bash; Inspector in Charge Adrian Gonzalez, U.S. Postal Inspection Service, Houston Division; and, San Antonio Police Chief William McManus.
Appearing before United States Magistrate Judge Elizabeth S. Chestney, Ahearn pleaded guilty to a total of seven federal charges including aiding and abetting carjacking; aiding and abetting use of a firearm during a crime of violence; aiding and abetting robbery of U.S. Mail; and, four counts of aiding and abetting assault on a federal officer. He faces 20 years in federal prison.
By pleading guilty, Ahearn admitted that on February 11, 2017, he shot a female U.S. Mail carrier as she was delivering mail to a cluster of mailboxes in Spring Branch, TX, because the victim would not would not give him her cell phone. The victim is still recovering from the gunshot that pierced both of her legs. Ahearn left the scene in the victim’s pickup truck while it still contained the victim’s purse and personal effects as well as a considerable amount of U.S. Mail. According to court records, Ahearn’s co-defendant, 27-year-old Sarah Richford, followed Ahearn in a maroon/brown colored Toyota Venza as he left the scene.
Two days after the shooting, a U.S. Postal Inspector spotted the Toyota Venza at a restaurant near the location of the shooting. The Postal Inspector attempted to initiate an investigative stop, but was unsuccessful as Ahearn fired a handgun in the direction of the federal officer. Ahearn admitted to firing his weapon at the U.S. Postal Inspector and another federal agent during a subsequent 19-mile-long, high-speed pursuit. Ahearn and Richford managed to avoid capture.
According to court records, on February 14, 2017, employees of a local motel notified investigators of the presence of a large amount of U.S. Mail and a handgun case in one of the motel rooms. Much of the discovered mail, originating from locations across the country, was destined for addresses in the Spring Branch, TX area. That same day, not far from the motel, investigators recovered the abandoned Toyota Venza. From motel surveillance footage, investigators discovered Ahearn, Richford and 41-year-old Piper Lee leave the motel in Lee’s yellow Volkswagen and requested San Antonio police to initiate a stop of the vehicle. While failing to yield to SAPD officers, Ahearn began shooting at the police officers and another high-speed pursuit ensued. Ultimately, the defendants abandoned their vehicle inside a parking garage of a local mall and managed to elude capture by law enforcement.
On February 15, 2017, San Antonio police officers, acting on information provided to investigators, arrested Ahearn, Richford and Lee without incident in a parking lot of a different local motel. All three remain in custody.
Richford is scheduled to have a re-arraignment hearing tomorrow at 2:30pm before Judge Chestney in San Antonio. She faces federal charges of aiding and abetting carjacking; aiding and abetting use of a firearm during a crime of violence; aiding and abetting robbery of U.S. Mail; and, two counts of aiding and abetting assault on a federal officer.
Lee is charged with two counts of aiding and abetting the assault of a federal officer; one count of aiding and abetting use of a firearm during a crime of violence; and, one count of possession of stolen mail. He is currently set for jury selection on August 20, 2018, before Chief U.S. District Judge Orlando L. Garcia.
It is important to note that an indictment is merely a charge and should not be evidence of guilt. A defendant is considered innocent until proven guilty in a court of law.
The U.S. Postal Inspection Service together with the San Antonio Police Department, Texas Department of Public Safety, Texas Rangers, Comal County Sheriff’s Office, Bulverde Police Department, Federal Bureau of Investigation, U.S. Marshals Service and Homeland Security Investigations (HSI) investigated this case. Assistant United States Attorneys Bettina Richardson and Christina Playton are prosecuting this case on behalf of the Government.
Sacramento Woman Sentenced to over 5 Years in Prison for a Scheme to Steal Mail Using Fraudulent Vacation Holds and Address Change FormsRead the Press Release
SACRAMENTO, Calif. — Latomba Bishop, 33 of Sacramento, was sentenced today to five years and 10 months in prison for a scheme to obtain mail through fraudulent vacation holds and mail forwarding requests and steal the identities of the mail theft victims, U.S. Attorney McGregor W. Scott announced. In addition, U.S. District Judge Troy L. Nunley ordered Bishop to pay $38,371 in restitution to the victims.
On November 30, 2017, Bishop pleaded guilty to mail fraud and aggravated identity theft in connection with the scheme.
According to court documents, Bishop and her co-defendants Joshua Yadon, 33, and Norman Thompson, 37, both of Sacramento, used stolen personal identifying information to fraudulently obtain credit cards, checks, and merchandise. To avoid detection, the conspirators would often request that the items be mailed to the victims’ real addresses but then would file false vacation holds and change of address forms with the United States Postal Service in order to divert the items into the conspirators’ possession.
San Francisco Division Inspector in Charge Rafael Nunez of the U.S. Postal Inspection Service stated, “Postal Inspectors worked closely with the U.S. Attorney’s Office and our partners in law enforcement to arrest and prosecute those individuals responsible for the thefts of mail and financial crimes committed against the public.”
Thompson pleaded guilty to the conspiracy and on October 5, 2017, was sentenced to three years and 10 months in prison. Yadon also pleaded guilty and is scheduled to be sentenced on April 12, 2018. Yadon faces a maximum statutory penalty of five years in prison and a $250,000 fine. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.
This case is the product of an investigation by the U.S. Postal Inspection Service with assistance from the Davis Police Department, Sacramento County Probation, and the Woodland Police Department. Assistant U.S. Attorney Jeremy J. Kelley is prosecuting the case.
Sacramento Man Indicted for Receipt of Child PornographyRead the Press Release
SACRAMENTO, Calif. — A federal grand jury returned a six-count indictment today against William Lamar Blessett, 38, of Sacramento, charging him with receipt and possession of child pornography, U.S. Attorney McGregor W. Scott announced.
According to court documents, a search of Blessett’s home revealed child pornography on at least six separate electronic devices, including a laptop, three smart phones, and two tablets.
This case was the product of an investigation by the Sacramento Internet Crimes Against Children (ICAC) Task Force, a federally and state-funded task force managed by the Sacramento Sheriff’s Department with agents from federal, state, and local agencies. The Sacramento ICAC investigates online child exploitation crimes, including child pornography, enticement, and sex trafficking. Assistant U.S. Attorney Amy Schuller Hitchcock is prosecuting the case.
If convicted, Blessett faces a minimum statutory penalty of 15 years in prison and a maximum penalty of 40 years in prison, as well as a $250,000 fine. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by the United States Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state, and local resources to locate, apprehend, and prosecute those who sexually exploit children, and to identify and rescue victims. For more information about Project Safe Childhood, please visit www.usdoj.gov/psc. Click on the “resources” tab for information about internet safety education.
Reserve Man Pleads Guilty to Gun and Drug ChargesRead the Press Release
U.S. Attorney Duane A. Evans announced that BRIAN BURNS, age 34, of Reserve, pled guilty today to charges relating to narcotics trafficking and illegal possession of firearms.
According to court documents, BURNS conspired to distribute at least 50 grams of methamphetamine. For that charge, BURNS faces a term of imprisonment of at least five and up to forty years, a fine of up to $5,000,000, and at least four years of supervised release following any term of imprisonment,
BURNS pled guilty to possession of firearms in furtherance of a drug trafficking crime. BURNS possessed a Remington Model AR-15, .223 caliber semi-automatic assault rifle; a Kel-Tec Model Tec-9, 9mm caliber semi-automatic pistol with an extended magazine; and a Taurus Model 738 TCP, .380 caliber, semi-automatic pistol. For the firearms charge, BURNS faces a minimum term of imprisonment of five years, which must run consecutive to any other sentence, and a maximum term of life imprisonment, a fine of $250,000, and three years of supervised release following any term of imprisonment.
Judge Nanette Jolivette Brown set sentencing for May 17, 2018 at 10:00 a.m.
U.S. Attorney Evans praised the work of the Drug Enforcement Administration and the St. John the Baptist Parish Sheriff’s Office. Assistant U.S. Attorneys Nicholas D. Moses and Jonathan L. Shih are in charge of the prosecution.
RI Man Charged in International Telemarketing Scheme Targeting U.S. CitizensRead the Press Release
PROVIDENCE, RI – A Pawtucket, Rhode Island man is among more than 250 defendants from around the globe named in criminal, civil and forfeiture fraud cases brought by federal and state law enforcement against individuals and organizations that allegedly victimized more than a million Americans, most of whom are elderly, it was announced today by Attorney General Jeff Sessions and United States Attorney Stephen G. Dambruch.
Attorney General Jeff Sessions and law enforcement partners announced today the largest coordinated sweep of elder fraud cases in history. The cases involve more than 250 defendants from around the globe who victimized more than a million Americans, most of whom were elderly. The cases include criminal, civil, and forfeiture actions across more than 50 federal districts, including Rhode Island. Of the defendants, 200 were charged criminally. In each case, offenders engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused losses of more than half a billion dollars. The Department coordinated its announcement with the FTC and state Attorneys General, who independently filed numerous cases targeting elder frauds within the sweep period.
Attorney General Sessions was joined in the announcement by FBI Acting Deputy Director David Bowdich; Chief Postal Inspector Guy Cottrell; FTC Acting Chairman Maureen Ohlhausen; and Kansas Attorney General and President of the National Association of Attorneys General Derek Schmidt.
“The Justice Department and its partners are taking unprecedented, coordinated action to protect elderly Americans from financial threats, both foreign and domestic,” said Attorney General Sessions. “Today’s actions send a clear message: we will hold perpetrators of elder fraud schemes accountable wherever they are. When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains. Today is only the beginning. I have directed Department prosecutors to coordinate with both domestic law enforcement partners and foreign counterparts to stop these criminals from exploiting our seniors.”
The actions charged a variety of fraud schemes, ranging from mass mailing, telemarketing and investment frauds to individual incidences of identity theft and theft by guardians. A number of cases involved transnational criminal organizations that defrauded hundreds of thousands of elderly victims, while others involved a single relative or fiduciary who took advantage of an individual victim. The schemes charged in these cases caused losses to more than a million victims.
In Rhode Island, United States Attorney Stephen G. Dambruch and Raymond D. Moss, Acting Inspector in Charge of the U.S. Postal Inspection Service (USPIS), Boston Division, announced the arrest of Shawn Whitfield, 47, of Pawtucket, on a federal criminal complaint charging him with mail fraud, conspiracy, wire fraud, and international money laundering.
According to court documents filed in Rhode Island, it is alleged that Whitfield participated in a telemarketing lottery scam originating out of Jamaica that targeted United States residents, many of them seniors. It is alleged the scammers led victims to believe that they have won a lottery. However, the cash or prizes they purportedly won would not be released without upfront payment of taxes or fees.
It is alleged that between April 2015 and January 2018, Whitfield collected an estimated $98,100 in payments from at least 47 individuals from 23 states who fell victim to the lottery telemarketing scam. It is alleged that the majority of funds collected by Whitfield were transferred electronically to individuals in Jamaica.
In this particular telemarketing scam, an individual in the United States receives an unsolicited telephone call from an individual in Jamaica claiming to work for a well-known organization, such as Publishers Clearinghouse. The scammer tells the victims that they have won large cash prizes, vacation getaways, vehicles, or other prizes. However, in order to collect their winnings, the individual is instructed to send money to pay for processing fees or taxes on their winnings. The scammer typically assures people that they will receive their prize shortly after the lottery has received their payment.
It is alleged in this matter that at least 47 individuals in 23 states were contacted via telephone and told of their purported winnings. They were instructed to send upfront payments for taxes and fees to Shawn Whitfield at his Pawtucket, R.I., residence. An investigation by the U.S. Postal Inspection Service and the U.S. Attorney’s Office determined that Whitfield collected an estimated $98,100, most of which was later transferred electronically by Whitfield to individuals in Jamaica. Additionally, investigators determined that between January 2016 and May 2017, there were 2,167 successfully completed incoming telephone calls to Whitfield’s cell phone from multiple telephone numbers in Jamaica and 415 successfully completed outgoing telephone calls from Whitfield’s cell phone to multiple telephone numbers in Jamaica.
USPIS agents, assisted by members of the Pawtucket Police Department, Rhode Island State Police and the U.S. Marshals Service, executed a court-authorized search of Whitfield’s residence on Tuesday. Whitfield was arrested simultaneously at his place of employment in Norwood, Mass., by USPIS agents, with the assistance of members of the Norwood Police Department. Whitfield was released on $10,000 unsecured bond and GPS monitoring following his initial appearance in U.S. District Court in Providence before U.S. District Court Magistrate Judge Patricia A. Sullivan.
A criminal complaint is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.
Shawn Whitfield is being prosecuted by Assistant U.S. Attorney Denise M. Barton, Elder Justice Coordinator for the United States Attorney’s Office for the District of Rhode Island.
Actions against the mass-mailing fraud industry
As part of the initiative, the Department’s Consumer Protection Branch, working with the U.S. Attorney’s Office for the Eastern District of New York and others, brought numerous cases this past week in a coordinated strike against more than 43 mass-mailing fraud operators, including criminal charges against six individuals. In addition, law enforcement agents executed 14 premises search warrants from Las Vegas to south Florida, served numerous asset seizure warrants, and coordinated with the Vancouver Police in Canada, who executed over 20 warrants, including search warrants on business premises.
“The defendants targeted elderly and vulnerable consumers both in the United States and abroad, using U.S. addresses and the U.S. mails to try to legitimize their fraudulent schemes,” said U.S. Attorney for the Eastern District of New York Richard P. Donoghue. “They sold false promises of life-changing prizes that never came true. We will pursue the perpetrators of these mail schemes wherever they are located, and hold them accountable.”
These recently filed cases particularly targeted transnational criminal actors who collectively defrauded at least a million victims out of hundreds of millions of dollars. Indeed, just one of the schemes prosecuted criminally by the Consumer Protection Branch operated from 14 foreign countries to cost American victims more than $30 million. Click here for map showing a transnational, single fraud scheme.
Mass-mailing fraud inflicts hundreds of millions of dollars in losses to elderly U.S. victims each year. Department prosecutors and U.S. Postal Inspectors have taken a comprehensive approach to combatting this fraud, disrupting and prosecuting individuals who manage the schemes, artists who draft the fraudulent solicitations, list brokers who supply victim lists, and individuals who collect victim payments.
Actions against other elder fraud schemes
Prosecutors across the country from the Criminal Division’s Fraud Section, the Consumer Protection Branch and the U.S. Attorney’s Offices have heeded the call to focus resources on elder fraud cases. Over 50 U.S. Attorney’s Offices and Department Components filed elder fraud cases in the last year. Some examples of the elder financial exploitation prosecuted by the Department include:
- “Lottery phone scams,” in which callers convince seniors that a large fee or taxes must be paid before one can receive lottery winnings;
- “Grandparent scams,” which convince seniors that their grandchildren have been arrested and need bail money;
- “Romance scams,” which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose;
- “IRS imposter schemes,” which defraud victims by posing as IRS agents and claiming that victims owe back taxes;
- “Guardianship schemes,” which siphon seniors’ financial resources into the bank accounts of deceitful relatives or guardians.
Many of these cases illustrate how an elderly American can lose his or her life savings to a duplicitous relative, guardian, or stranger who gains the victim’s trust. The devastating effects these cases have on victims and their families, both financially and psychologically, make prosecuting elder fraud a key Department priority.
Public Education
The Department has partnered with Senior Corps, a national service program administered by the federal agency the Corporation for National and Community Service, to educate seniors and prevent further victimization. The Senior Corps program engages more than 245,000 older adults in intensive service each year, who in turn, serve more than 840,000 additional seniors, including 332,000 veterans.
Using its vast network operating in more than 30,000 locations, Senior Corps volunteers will communicate about elder fraud to potential victims across the country and will use their skills, knowledge and experience to educate their peers and caregivers about the most prolific types of schemes and how to avoid them.
- If you are a victim or know a victim of elder fraud, you can call 1-877-FTC-HELP or go to ftc.gov/complaint
- For downloadable Elder Abuse Prevention resources and for information about community outreach programs in Rhode Island, visit the United States Attorney’s Office’s Elder Justice Initiative web page at https://www.justice.gov/usao-ri/elder-justice
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Physician Practicing in Grass Valley and Yuba City Sentenced to over 4 Years in Prison for Illegal Prescription PracticeRead the Press Release
SACRAMENTO, Calif. — A formerly licensed physician, Nicholas J. Capos Jr., 67, of Yuba City, was sentenced today by U.S. District Judge Morrison C. England Jr. to four years and four months in prison for selling prescriptions of controlled substances such as oxycodone and methadone, U.S. Attorney McGregor W. Scott announced.
“By prescribing medications to patients he never physically examined in amounts clearly intended for abuse and resale, Capos injected potent and potentially lethal drugs into the community, putting lives at risk,” said U.S. Attorney Scott. “The U.S. Attorney’s Office is committed to doing its part to combat the nation’s opioid crisis by devoting resources to cases like this and working with our law enforcement partners to end the unlawful distribution of these dangerous drugs.”
“The public should have confidence that practicing physicians will adhere to the do‑no‑harm principle. Nicholas Capos did just the opposite when he prescribed oxycodone without legitimate medical purpose and outside the usual course of practice. This type of reckless behavior provides fuel to the fire of the opioid epidemic plaguing our nation,” stated DEA Special Agent in Charge John J. Martin.
According to court documents, between April 3, 2008, and October 30, 2012, Capos, who was then a licensed physician with a specialty in cardiology, knowingly and intentionally prescribed controlled substances without properly examining the patients and ignoring obvious signs that the patients were abusing or reselling the medications. He prescribed quantities far in excess of human tolerance and charged patients a “DEA Fee” of $100 per prescription, which is contrary to accepted medical practice. He is no longer licensed to practice medicine.
On May 5, 2016, Capos pleaded guilty to distribution and dispensation of oxycodone. According to the plea agreement, Capos prescribed 2,640 APAP/Hydrocodone 325/10 pills in 28 days for one patient (325 mg acetaminophen and 10 mg hydrocodone). At that rate, the patient
Pennsylvania Woman Sentenced for Stealing Funds Which Resulted in Closing of Credit UnionRead the Press Release
CONTACT: Barbara Burns
PHONE: (716) 843-5817
FAX #: (716) 551-3051BUFFALO, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced today that Norma Gold, 57, of Eldred, PA, who was convicted of making false entries in federal credit union reports, was sentenced to 30 months in prison by U.S. District Judge Richard J. Arcara. The defendant was also ordered to pay restitution totaling $179,939.21.
Assistant U.S. Attorney Marie P. Grisanti, who handled the case, stated that Gold was an employee of the Olean Tile Employees Federal Credit Union (OTEFCU) for approximately 26 years between 1986 and December 2012. For a portion of her tenure, Gold served as office manager and was responsible for keeping accurate financial records on behalf of the Credit Union.
Between December 2007 and December 2012, Gold embezzled funds and made false entries in OTEFCU’s general ledger and altered financial statements, making it appear that the OTEFCU’s account balances were larger than they actually were. Gold’s conduct caused substantial hardship to the OTEFCU and it was ultimately forced to close as a result of the theft. The OTEFCU suffered a total loss of $179,939.21.
The sentencing is the result of an investigation by the Federal Bureau of Investigation, under the direction of Acting Special Agent-in-Charge Kevin P. Lyons; the National Credit Union Administration; the U.S. Secret Service, under the direction of Special Agent-in-Charge Lewis Robinson; and the Olean Police Department, under the direction Chief Jeffrey Rowley.
Pennsylvania Tobacco Distributor Sentenced for Aiding Tobacco Trafficking in MassachusettsRead the Press Release
BOSTON – A Pennsylvania wholesale tobacco distributor was sentenced yesterday in federal court in Boston for aiding and abetting untaxed shipments of tobacco products into Massachusetts and evading financial reporting requirements.
Kamlesh Patel, 60, was sentenced by U.S. District Court Judge Douglas P. Woodlock to one year and one day in prison, two years of supervised release, and ordered to pay fine of $500,000 and forfeiture of $153,846. In September 2017, Patel pleaded guilty to one count of aiding and abetting a Norwood-based wholesaler to violate the Prevent All Cigarette Trafficking Act (PACT Act) and one count of failing to report large cash transactions to the IRS.
Patel owned and operated RDK Distributors (RDK) and MV Distributors (MV) in Stroudsburg, Penn., through which he distributed wholesale quantities of cigars, smoking tobacco and smokeless tobacco (such as snuff and chewing tobacco), among other products.
Title 15 of the PACT Act requires people who sell, advertise for sale, transfer or ship for profit smokeless tobacco between states to file a statement with the Attorney General and the tobacco tax administrator in the states to which they ship their products. The PACT Act also requires them to file with the tax administrator a monthly record of each shipment of smokeless tobacco that they transport into the state.
Beginning in approximately January 2013, Patel sold large quantities of tobacco products to a Norwood wholesaler, often worth more than $100,000 at a time. The Norwood wholesaler typically paid Patel for the tobacco products in cash. To evade financial reporting requirements that would have notified the IRS of the size, nature and income of the Norwood wholesaler’s business, Patel falsely divided the bulk cash payments he received among multiple invoices. Patel created and instructed his employees to record the large cash payments he received as if there had been numerous sales over numerous days among numerous companies, each less than $10,000, rather than the single sale for which he had received one or two sizeable cash payments, often amounting to more than $100,000 at a time.
United States Attorney Andrew E. Lelling and Joel P. Garland, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. The Massachusetts Department of Revenue also provided valuable assistance. Assistant U.S. Attorney Stephen Heymann of Lelling’s Economic Crimes Unit prosecuted the case.
Pekin Man to be Sentenced for Defrauding Elderly VictimRead the Press Release
PEORIA, Ill., A Pekin, Ill., man, Deryl Wright, 42, of the 1400 block of Camden St., is scheduled to be sentenced next week, on Feb. 28, 2018, after admitting that he engaged in a two-year scheme that defrauded an elderly, vulnerable victim of nearly $100,000.
Wright is among the more than 250 defendants included in today’s announcement by Attorney General Jeff Sessions and the Department of Justice of the largest coordinated sweep of elder fraud cases in history. In total, the charged elder fraud schemes caused losses of more than half a billion dollars.
“The Justice Department and its partners are taking unprecedented, coordinated action to protect elderly Americans from financial threats, both foreign and domestic,” said Attorney General Sessions. “Today’s actions send a clear message: we will hold perpetrators of elder fraud schemes accountable wherever they are. When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains. Today is only the beginning. I have directed Department prosecutors to coordinate with both domestic law enforcement partners and foreign counterparts to stop these criminals from exploiting our seniors.”
Many of these cases illustrate how an elderly American can lose his or her life savings to a duplicitous relative, guardian, or stranger who gains the victim’s trust. The devastating effects these cases have on victims and their families, both financially and psychologically, make prosecuting elder fraud a key Department priority.
Wright was indicted in September 2017, and on Nov. 22, 2017, pleaded guilty to the three counts of wire fraud charged. Wright admitted that beginning in 2015 and continuing to April 2017, he defrauded the victim under the premise that Wright’s father had died and he was to inherit a large sum of money. Wright told the victim that he needed to borrow money to receive the inheritance check and that he would pay back the victim from the inheritance money. In fact, Wright had no such inheritance check; rather, the money he obtained from the victim was used to support his lifestyle and for his personal benefit.
It was part of the scheme that Wright gave the victim a continual source of reasons why the inheritance check was delayed or he was unable to obtain it. For example, Wright said he needed money to pay taxes and for processing fees; for claimed arrests, car accidents, and hospital admissions that did not occur; or, for car repairs so he could travel to pick up the check. Wright asked the victim to wire the money using money transfers at Walmart in Pekin, Ill., to Walmart stores located out of state.
At sentencing, the maximum penalty for wire fraud is up to 20 years in prison. Wright has remained in the custody of the U.S. Marshals Service since his arrest on Oct. 2, 2017.
The Pekin Police Department investigated the charges. Assistant U.S. Attorney Katherine G. Legge is prosecuting the case in the Peoria Division of the U.S. Attorney’s Office for the Central District of Illinois.
Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime, which can be reached at www.ovc.gov.
Partner at International Law Firm Sentenced for Insider TradingRead the Press Release
Geoffrey H. Berman, the United States Attorney for the Southern District of New York, announced today that WALTER C. LITTLE, a/k/a “Chet,” a former partner at an international law firm (the “Firm”), was sentenced today to 27 months in prison for conspiring to commit insider trading from at least February 2015 through May 2016. LITTLE pled guilty on November 9, 2017, before U.S. District Judge Katherine Polk Failla, who also imposed today’s sentence.
U.S. Attorney Geoffrey H. Berman said: “Walter Little, a law firm partner with access to sensitive nonpublic client information, selfishly chose to exploit it for personal gain rather than safeguard it. Today’s sentence underscores the seriousness of insider trading, as Little will now serve serious time in prison.”
According to allegations in a Complaint and Indictment filed in Manhattan federal court, as well as previous court filings and statements made in public court proceedings:
LITTLE began working for the Firm as an associate in 2005 and eventually became a partner. The Firm provided legal services in connection with financial transactions and regulatory issues to a wide variety of clients. Those clients entrusted the Firm with nonpublic information when using its services. Contrary to Firm policies requiring that this information be kept secret and be used only for business purposes, LITTLE improperly accessed sensitive information on the Firm’s servers and used it to make profitable securities trades. LITTLE viewed numerous documents that contained material nonpublic information about, among other things, an anticipated delisting from the NASDAQ stock exchange, unannounced mergers and acquisitions, anticipated earnings releases, and a planned securities offering. All of these events had predictable impacts on the associated stocks’ prices, and, between February 2015 and May 2016, LITTLE made hundreds of thousands of dollars trading stocks and options based on the information contained in these documents.
In addition to trading on the information himself, LITTLE also provided the information to Andrew Berke, his business associate and friend, who also traded on it and made hundreds of thousands of dollars in illegal gains as well. At LITTLE’s request, Berke subsequently kicked back portions of his own profits to LITTLE through the use of fake legal invoices. Berke pled guilty on December 28, 2017, to his role in the scheme and is scheduled to be sentenced on April 17, 2018.
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In addition to the prison sentence, LITTLE, 44, was sentenced to three years of supervised release. The Court further ordered LITTLE to forfeit a sum of $452,998.
Mr. Berman praised the work of the Federal Bureau of Investigation, and thanked the Securities and Exchange Commission for its assistance.
This case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant United States Attorneys Robert Allen and Samson Enzer are in charge of the prosecution.
Pair of Bank Robbers Sentenced for Armed Bank RobberyRead the Press Release
Two men who robbed the Citizens State Bank in Hopkinton, Iowa were sentenced today to more than 10 years’ in federal prison.
Daniel Louis Jackson, age 28, from Yonkers, New York, received the prison term after an October 12, 2017, jury verdict finding him guilty of armed bank robbery, conspiracy to commit armed bank robbery, aiding and abetting the use, carrying, and brandishing of a firearm during a crime of violence, and conspiracy to use, carry, and brandish a firearm during a crime of violence. Jason Centeno, age 22, from Yonkers, New York, received the prison term after a September 14, 2017, guilty plea to armed bank robbery and using, carrying, and brandishing a firearm during a crime of violence.
Evidence at trial showed that Jackson and Centeno moved to Muscatine, Iowa, during the summer of 2016. While in Iowa, they reached an agreement to rob the Citizens State Bank in Hopkinton, Iowa. Prior to the robbery, Jackson obtained a .38 caliber revolver from an individual in Detroit, Michigan. Video evidence admitted at trial obtained from a cell phone showed both men using the firearm prior to the robbery. One video showed Centeno shooting at various residences from the passenger seat of a car driven by Jackson. A second video showed Jackson and Centeno shooting at what appeared to be an abandoned warehouse.
On the morning of October 21, 2016, Jackson and Centeno drove Jackson’s car from Muscatine to Hopkinton. Centeno entered the bank brandishing the firearm, while Jackson carried a knife. Both men jumped over the bank counter and demanded money from the two employees working at the time. While Centeno collected money from one teller at gun point, Jackson forced the other teller to place her hands behind her back and restrained her using zip ties. Jackson and Centeno had purchased the zip ties together the day before at the Wal-Mart in Muscatine. During the robbery, a third bank employee entered the bank. Jackson also ordered him to place his hands behind his bank and secured his hands with zip ties. Jackson and Centeno left the bank, taking more than $8,000, and returned to Muscatine. Jackson and Centeno the fled from Iowa, first to Yonkers, New York, and later to Florida, where they were eventually arrested by the Volusia County Sheriff’s Office.
Jackson and Centeno were sentenced in Cedar Rapids by Chief United States District Court Leonard T. Strand. Jackson was sentenced to 180 months’ imprisonment. A special assessment of $400 was imposed, and he was ordered to make $8,225 in restitution to the Citizens State Bank. Centeno was sentenced to 130 months’ imprisonment. A special assessment of $200 was imposed, and he was ordered to make $8,225 in restitution Citizens State Bank. Both men must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system. In imposing these sentences, the court noted the “egregious and violent” nature of the offense.
Jackson and Centeno are being held in the United States Marshal’s custody until they can be transported to a federal prison.
The case is being prosecuted by Assistant United States Attorneys Lisa C. Williams and Jacob Schunk and was investigated by the Iowa Division of Criminal Investigation, the Federal Bureau of Investigation, the Delaware County Sheriff’s Office, the Muscatine County Sheriff’s Office, the Muscatine Police Department, the Manchester Police Department, the Yonkers Police Department, and the Volusia County Sheriff’s Office.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 16-cr-2057.
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Oakland Man Sentenced to 12 Months for Conspiring to Alter U.S. Postal Money OrdersRead the Press Release
U.S. Attorney Duane A. Evans announced that DARREN BRANDON WILLIAMS, age 29, of Oakland, California, was sentenced to 6 months of incarceration followed by 6 months of home confinement by United States District Court Judge for the Eastern District of Louisiana Sarah S. Vance after he previously pleaded guilty to conspiracy to alter U.S. Postal money orders.
According to the court records, WILLIAMS conspired with others in the New Orleans area to buy U.S. Postal money orders in small amounts (typically $1.00) and then the money orders were sent out of state where they were altered to much higher amounts. WILLIAMS, working with other conspirators, then enlisted individuals to deposit the altered U.S. Postal money orders into local bank accounts. Once the money orders cleared, the funds were withdrawn and split by WILLIAMS and the conspirators.
In addition to 12 months, WILLIAMS was sentenced to 3 years of supervised release, ordered to pay $25,000 in restitution to two victim banks and ordered to pay a fine of $2,000.
U. S. Attorney Evans praised the investigative work of the United States Postal Inspector Office for its handling of the matter. Assistant U.S. Attorney Edward J. Rivera was in charge of the prosecution.
New York Woman Admits to Embezzling $1.1 Million from Darien Auto DealershipRead the Press Release
John H. Durham, United States Attorney for the District of Connecticut, announced that VANESSA VENCE-SMALL, 50, of New Windsor, New York, waived her right to be indicted and pleaded guilty today before U.S. District Judge Jeffrey Alker Meyer in New Haven to one count of wire fraud arising from an embezzlement scheme.
According to court documents and statements made in court, VENCE-SMALL was the controller of Felix F. Callari, Inc., doing business as Continental BMW of Darien, an automobile dealership. From October 2014 to June 2017, VENCE-SMALL made 65 unauthorized electronic fund transfers, totaling $904,659.29, from the dealership’s bank account to her personal American Express account. VENCE-SMALL also issued and signed 28 checks drawn on the dealership’s bank account, in the total amount of $207,777.78, to pay various third parties, including credit card companies, contractors who performed work at her residence, and a different dealership from which she purchased a car. She also incurred on company accounts an additional $31,452.08 in unauthorized credit card charges and reimbursements.
Judge Meyer scheduled sentencing for May 24, 2018, at which time VENCE-SMALL faces a maximum term of imprisonment of 20 years, a fine of up to approximately $2.3 million, and an order of full restitution.
VENCE-SMALL is released on a $100,000 bond pending sentencing.
This matter is being investigated by the U.S. Secret Service, Darien Police Department and Connecticut Financial Crimes Task Force. This case is being prosecuted by Assistant U.S. Attorney Hal Chen.
New Castle Man Admits Traveling for Sex with a MinorRead the Press Release
PITTSBURGH - A Lawrence County resident pleaded guilty in federal court to a charge of travel with intent to engage in illicit sexual conduct, United States Attorney Scott W. Brady announced today.
Bradley Richard Moore, 44, of New Castle, Pennsylvania, pleaded guilty before United States District Judge Arthur J. Schwab.
In connection with the guilty plea, the court was advised that Moore posted an ad on Craigslist seeking to "participate in real incest." A Special Agent of the Office of the Pennsylvania Attorney General working in an undercover capacity posed as an adult male and responded to this advertisement. During communications with the advertisement’s poster, the undercover agent stated that he was a father of a 12-year-old boy who would be open to a sexual relationship with the poster. On October 14, 2017, Moore knowingly traveled from Ohio to Cranberry, Twp., Pennsylvania, for the purpose of engaging in illicit sexual conduct with the child.
United States District Judge Schwab scheduled sentencing June 13, 2018, at 9 a.m. The law provides for a maximum total sentence of 30 years imprisonment, a fine of $250,000.00, a term of lifetime supervised release, or any or all. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant United States Attorney Jessica Lieber Smolar is prosecuting this case on behalf of the government.
The Federal Bureau of Investigation and Office of the Pennsylvania Attorney General conducted the investigation that led to the prosecution of Moore.
This case was brought as part of Project Safe Childhood, a nationwide initiative to combat the growing epidemic of child sexual exploitation and abuse launched in May 2006 by the Department of Justice. Led by United States Attorneys’ Offices and the Criminal Division's Child Exploitation and Obscenity Section (CEOS), Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.
Navajo Man from McKinley County Pleads Guilty to Child Sexual Abuse ChargeRead the Press Release
ALBUQUERQUE – Clyde Peterson, 46, an enrolled member of the Navajo Nation who resides in Yahtahey, N.M., pled guilty this morning in federal court in Albuquerque, N.M., to a sexual abuse of a minor or ward charge. Under the terms of his plea agreement, Peterson will be sentenced 21 months in prison followed by a term of supervised release to be determined by the court. Peterson also will be required to register as a sex offender.
Peterson was arrested on April 18, 2016, on an indictment charging him with sexual abuse of a child between the ages of 12 and 16 years from June 1, 2014 through Aug. 31, 2014, on the Navajo Indian Reservation in McKinley County, N.M.
During today’s change of plea hearing, Peterson pled guilty to the indictment, and admitted that between June 1, 2014 and Aug. 31, 2014, he engaged in sexual intercourse with the victim who was between the age of 12 and 16 years. A sentencing hearing has yet to be scheduled.
This case was investigated by the Gallup office of the FBI and is being prosecuted by Assistant U.S. Attorney Nicholas J. Marshall pursuant to the Tribal Special Assistant U.S. Attorney (Tribal SAUSA) Pilot Project in the District of New Mexico which is sponsored by the Justice Department’s Office on Violence Against Women under a grant administered by the Pueblo of Laguna. The Tribal SAUSA Pilot Project seeks to train tribal prosecutors in federal law, procedure and investigative techniques to increase the likelihood that every viable violent offense against Native women is prosecuted in either federal court or tribal court, or both. The Tribal SAUSA Pilot Project was driven largely by input gathered from annual tribal consultations on violence against women, and is another step in the Justice Department's on-going efforts to increase engagement, coordination and action on public safety in tribal communities.
Navajo Man from Gallup Sentenced to Prison for Making False Statements to the FBIRead the Press Release
ALBUQUERQUE – Bronson Tony, 45, an enrolled member of the Navajo Nation who resides in Gallup, N.M., was sentenced today in Santa Fe, N.M., federal court to a six-month term of imprisonment followed by one year of supervised release for making false statements to the FBI.
Bronson Tony was charged in a felony information filed on Aug. 14, 2017, with making a false statement to the FBI on May 14, 2016 and June 2, 2016. The information alleged that Bronson Tony falsely represented to the FBI that he and others did not accompany Brian Tony, 46,of Gallup, and a male victim to an area on the Navajo Indian Reservation in McKinley County, N.M., on May 8, 2016, where the male victim was later murdered.
Bronson Tony entered a guilty plea to the felony information on Aug. 14, 2017, and admitted that on May 8, 2016, Brian Tony, the victim, he and others drove to an area on the Navajo Indian Reservation called “Superman Canyon.” Bronson Tony stated that he did not leave the vehicle or see what occurred outside of the vehicle, and kept the victim’s friend from leaving the vehicle after the victim and Brian Tony were heard yelling outside of the vehicle. Brian Tony later re-entered the vehicle without the victim.
In his plea agreement, Bronson Tony admitted that on May 14, 2016, when he was interviewed by an FBI agent regarding the victim’s death, he made false statements regarding his whereabouts on May 8, 2016 and May 9, 2016. Specifically Bronson Tony denied accompanying Brian Tony to “Superman Canyon,” and claimed that Brian Tony injured his arm on barbed wire. Bronson Tony further admitted that on June 2, 2016, during a subsequent interview with an FBI agent regarding the victim’s death, he made false statements regarding the individuals present at the time of the victim’s death.
A federal jury found Brian Tony guilty of first degree murder and two counts of witness tampering on Sept. 30, 2017. At sentencing, Brian Tony faces a statutory mandatory sentence of life imprisonment.
This case was investigated by the Albuquerque and Gallup offices of the FBI. The case against Brian Tony was also investigated by the Albuquerque and Gallup offices of the FBI and the Navajo Nation Division of Public Safety. Both cases are being prosecuted by Assistant U.S. Attorneys Joseph M. Spindle and Nicholas J. Marshall.
Municipal, State, and Federal Partnership Targets Car ThievesRead the Press Release
Anchorage, Alaska – U.S. Attorney Bryan Schroder announced today that a federal grand jury in Anchorage has returned a series of indictments over the last few months charging individuals for various alleged firearms offenses arising from a number of vehicle thefts investigated by the Anchorage Police Department (APD).
The U.S. Attorney’s Office for the District of Alaska and its law enforcement partners have combined resources to address Anchorage’s car theft problem. In the past few months, federal gun charges have been filed against 10 individuals, all of whom reside in Anchorage, in connection with a number of stolen vehicle investigations:
- Jesse Contreras, 24, is currently charged with being a felon in possession of a firearm on two different occasions. Contreras was stopped by APD while in a stolen vehicle, and has prior state felony convictions for coercion and assault;
- Christopher Curtin, 30, is currently charged with being a felon in possession of a firearm. Curtin had burglar and auto theft tools in a vehicle, and has a prior state felony conviction for misconduct involving a controlled substance;
- Timothy Fyffe, 35, is currently charged with being a felon in possession of a firearm. Fyffe has a previous vehicle theft conviction with the state of Alaska, and has additional state charges pending for theft and vehicle theft;
- Jarsis Howard, 40, is currently charged with being a felon in possession of a firearm. Howard has prior felony convictions for misconduct involving a controlled substance, theft, and failure to register as a sex offender, among other offenses. Howard has additional state charges pending against him for vehicle theft and failure to register as a sex offender;
- Cody Iverson, 23, is currently charged with being a felon possession of a firearm. Iverson has a prior felony conviction for robbery, and has additional state charges pending for robbery and theft;
- Poly Lomu, 21, is currently charged with being a felon in possession of a firearm. Lomu has prior felony convictions for theft and vehicle theft, and has additional state charges pending for vehicle theft;
- Todd Margerum, 47, is currently charged for being a drug user in possession of a firearm, and for possession of a stolen firearm. Margerum was stopped in a stolen vehicle and has additional state charges pending for vehicle theft;
- Antoni Peralta, 31, is currently charged with being a felon in possession of a firearm. Peralta has prior felony convictions for vehicle theft and robbery;
- Navy Tauinaola, 35, is currently charged with being a felon in possession of a firearm on three different occasions. Tauinaola has prior felony convictions for failure to stop at direction of officer and a felony DUI, and has additional state charges pending for vehicle theft;
- Tony Tuaato, 23, is currently charged with being felon in possession of a firearm and possession of an unregistered firearm. When Tuaato was stopped, APD recovered a sawed off shotgun. Tuaato has prior felony convictions for vehicle theft and unlawful taking or driving of vehicle, and has additional state charges pending for attempted murder.
If convicted, they each face a maximum sentence of ten years in prison, a $250,000 fine, and three years of supervised release.
In addition, Roy Naughton, 39, of Anchorage, was indicted in December 2017 on federal carjacking charges. If convicted, Naughton faces a maximum sentence of 25 years in prison, a $250,000 fine, and five years of supervised release.
These cases were investigated by APD’s Property Crime Unit, with the cooperation and assistance from the Alaska Department of Law, FBI and ATF. Several are being handled by a Special Assistant U.S. Attorney, who is an Anchorage Municipal Prosecutor on loan to the U.S. Attorney’s Office to prosecute firearm, drug, and violent crime offenses that occur in Anchorage.
These cases were brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates the lessons learned since PSN launched in 2001. Alaska U.S. Attorney Bryan Schroder has made partnerships with state and local police departments and prosecutors a cornerstone of this strategy. The above cases are the result of this partnership.
An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
More Alarm Monitoring Company Workers Admit to Stealing from CompanyRead the Press Release
HOUSTON – The final two defendants charged in a conspiracy to commit wire fraud involving their former employer have pleaded guilty, announced U.S. Attorney Ryan K. Patrick.
Michell Garcia, 36, and Ray Torres, 46, both of Houston, admitted they electronically submitted falsified vendor requests for payment to divert money to themselves from their former employer’s bank account. Torres pleaded guilty today, while Garcia pleaded guilty Feb. 16, 2018. A third member of the scheme - Sonja Martinez, 47 of Rosharon, entered her guilty plea Feb. 9, 2018.
All three worked at the Houston branch of a Florida-based security company that installed, tested and monitored fire and security systems. The Florida company had acquired the Houston branch from another company and Garcia, Torres and Martinez all worked at the predecessor company.
The company used third party vendors to install its alarm systems. Garcia, Torres and Martinez all worked in the Accounting Department and were responsible for paying the vendors and noting in the company’s accounting system. From November 2011 until May 2016, they all participated in a scheme to divert approximately $1,661,163 to themselves and their family members.
A computer in Texas was used to submit fraudulent vendor requests for payment to their employer’s out-of-state bank. The defendants then utilized an electronic bank token to release funds and transfer money from their employer’s account to their own bank accounts and the bank accounts of their relatives.
U.S. District Judge Keith Ellison set sentencing for Torres on May 10, 2018, while Garcia and Martinez are set for May 3 and April 26, 2018, respectively. All face up to five years in federal prison and a possible $250,000 fine. At the hearing today, the court also entered a money judgment against Torres for $174,647.48, while Garcia and Martinez have respective money judgements for $801,198.40 and $739,450.36.
All were permitted to remain on bond pending their sentencing hearings.
The FBI conducted the investigation. Assistant U.S. Attorney Belinda Beek is prosecuting the case.
Montgomery man pleads guilty for role in federal drug conspiracyRead the Press Release
BECKLEY, W.Va. – A Montgomery man pled guilty today for his role in a drug trafficking conspiracy, announced United States Attorney Mike Stuart. Rory White, also known as “Dub,” 34, entered his guilty plea to conspiracy to distribute and possess with intent to distribute more than 100 grams of heroin and a quantity of oxycodone. White is one of 23 defendants indicted in June 2017 after a comprehensive investigation of drug trafficking in Southern West Virginia.
U.S. Attorney Stuart commended the cooperative investigative efforts of several agencies. The investigation was led by the Federal Bureau of Investigation and the Raleigh County Drug and Violent Crime Task Force. The Drug Enforcement Administration, the Beckley Police Department, the Raleigh County Sheriff’s Department, the West Virginia State Police, the Bureau of Alcohol, Tobacco, Firearms and Explosives, and the United States Postal Inspection Service provided assistance throughout the investigation.
“The teamwork that law enforcement demonstrated to complete this investigation is outstanding,” said U.S. Attorney Stuart. “I can assure you that we will keep working together as a team to hold drug criminals accountable and take back our communities from this drug epidemic.”
White admitted that between October 2016 and June 28, 2017, he took part in a drug trafficking conspiracy with multiple participants. During this time period, White admitted to working with Cheyenne Fragale and others to distribute heroin and oxycodone in the Fayette County area. White also admitted that he distributed approximately 5,400 thirty mg oxycodone tablets and approximately 900 grams of heroin to Cheyenne Fragale and others. He further admitted that he knew Cheyenne Fragale and others intended to redistribute the pills and heroin. White faces at least five and up to 40 years federal prison when he is sentenced on June 6, 2018.
Several individuals implicated as a result of this investigation have entered guilty pleas to drug charges and are awaiting sentencing. Cheyenne Fragale and Macon Fragale, two brothers from Boomer in Fayette County, face a mandatory minimum of 10 years and up to life in federal prison when they are sentenced on March 14, 2018. Velarian Carter, of Beckley, faces a mandatory minimum of not less than 20 years and up to life in federal prison when he is sentenced on April 17, 2018. Dominic Copney, of Beckley, faces a mandatory minimum of five and up to 40 years in federal prison when he is sentenced on April 17, 2018. Detria Carter, of Beckley, faces a mandatory minimum sentence of not less than five and up to 40 years in federal prison when she is sentenced on April 24, 2018. Donald Scalise, of Montgomery, faces up to 20 years in federal prison when he is sentenced on April 25, 2018. Tiffany Ramsey, of Boomer, faces at least five years and up to 40 years in federal prison when she is sentenced on May 2, 2018. Shawn Akiem Anderson, of Mt. Hope, faces up to 10 years in federal prison when he is sentenced on May 29, 2018.
Karl Funderburk, of Teays Valley, who previously pled guilty to a gun charge, faces at least 5 years and up to life in federal prison for using and carrying a firearm during a drug trafficking crime when he is sentenced on May 29, 2018.
Assistant United States Attorney Timothy D. Boggess is in charge of these prosecutions. The White plea hearing was held before United States District Judge Irene C. Berger.
These cases are being prosecuted as part of an ongoing effort led by the United States Attorney’s Office for the Southern District of West Virginia to combat the illicit sale and misuse of illegal drugs. The U.S. Attorney’s Office, joined by federal, state and local law enforcement agencies, is committed to aggressively pursuing and shutting down pill trafficking, eliminating open air drug markets, and curtailing the spread of illegal drugs in communities across the Southern District.
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Monroe man sentenced to 10 years in prison for methamphetamine distributionRead the Press Release
MONROE, La. – United States Attorney Alexander C. Van Hook announced today that a man from Monroe was sentenced Wednesday to 120 months in prison for distribution of methamphetamine.
Devin S. McMillian, 27, of Monroe, La., was sentenced by U.S. District Judge S. Maurice Hicks Jr. on one count of possession with intent to distribute controlled substances. He was also sentenced to five years of supervised release. According to the September 14, 2017 guilty plea, Ouachita Parish Sheriff’s deputies conducted a traffic stop February 16, 2017 on the vehicle McMillian was driving. They found 23 grams of methamphetamine. McMillian made a call from prison to a friend after the arrest. He told the friend to travel to his residence and retrieve some items. Deputies overheard the call and searched the house. They found 754.9 grams of methamphetamine and one gram of marijuana.
The DEA and the Ouachita Parish Sheriff’s Office Special Crimes Apprehension Team conducted the investigation. Assistant U.S. Attorney Tiffany E. Fields prosecuted the case.
Monroe County Woman Charged with Straw Purchases of FirearmsRead the Press Release
SCRANTON - The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Kassandra Mattox, age 25, of Tobyhanna, Pennsylvania, was indicted on September 19, 2017, by a federal grand jury on multiple counts of making false statements to federally licensed firearms dealers. The indictment was unsealed yesterday following the arrest of Mattox.
According to United States Attorney David J. Freed, the indictment alleges that Mattox provided false information regarding the purchase of three firearms from Dunkelberger’s Sports Outfitter, in Stroudsburg, Monroe County, on October 24 and 27, 2016, and the purchase of three firearms from Pocono Mountain Firearms, in Scotrun, Monroe County, on October 27, 2016 and November 9, 2016.
This matter was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives, the Pennsylvania State Police, and the Pocono Mountain Regional Police Department. Assistant U.S. Attorney Robert J. O’Hara is prosecuting the case.
This case was brought as part of Project Safe Neighborhoods (PSN), a program that has been historically successful in bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN and directed all U.S. Attorney’s Offices to develop a district crime reduction strategy that incorporates all lesson learned since PSN launched in 2001.
Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.
A sentence following a finding of guilt is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The maximum penalty under federal law for these offenses is ten years’ imprisonment, a term of supervised release following imprisonment, and a fine. Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant's educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.
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Middle District of Tennessee Persists in Fight Against Elder Fraud and AbuseRead the Press Release
Attorney General Jeff Sessions and law enforcement partners emphasized today the importance of the fight against elder fraud and abuse as the Department of Justice announced the largest coordinated sweep of elder fraud cases in history. Joined by representatives of the FBI, FTC, Postal Inspection Service, National Association of Attorneys General, and Senior Corps, among others, the Attorney General discussed the filing of more than 80 federal elder fraud cases against over 250 defendants. The cases include criminal, civil, and forfeiture actions in more than 50 federal districts. In each case, offenders engaged in financial schemes that targeted or largely affected seniors. The charged schemes caused over half a billion dollars of loss to more than one million victims. One of these cases is one of several elder fraud and abuse cases and investigations currently pending in the Middle District of Tennessee.
“The Justice Department and its partners are taking unprecedented, coordinated action to protect elderly Americans from financial threats, both foreign and domestic,” said Attorney General Sessions. “Today’s actions send a clear message: we will hold perpetrators of elder fraud schemes accountable wherever they are. When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains. Today is only the beginning. I have directed Department prosecutors to coordinate with both domestic law enforcement partners and foreign counterparts to stop these criminals from exploiting our seniors.”
“Many senior citizens experience circumstances that make them particularly vulnerable to fraud and abuse,” said U.S. Attorney Don Cochran. “This Office has been honored to participate in the Department of Justice’s Elder Justice Initiative, and to be home to one of its 10 regional Elder Justice Task Forces. We will continue to vigorously pursue and prosecute those who take advantage of seniors and the federal programs that serve them, and to coordinate with our state and local partners to fight elder fraud and abuse throughout our region.”
Over the last four years, this Office has obtained judgments, settlements, or indictments in over a dozen elder fraud and abuse cases. On March 30, 2016, the Department of Justice announced the formation of 10 regional Elder Justice Task Forces, including one in the Middle District of Tennessee. These teams have worked to bring together federal, state, and local prosecutors, law enforcement, and oversight agencies to provide community outreach and law enforcement training relating to elder fraud and abuse issues.
Since its formation, the Middle District of Tennessee’s Elder Justice Task Force has met regularly to discuss issues facing senior citizens. The Task Force includes representatives from, among others, the FBI, HHS, TBI, Tennessee Commission on Aging and Disability, and the Tennessee Department of Health. In light of the recently enacted Elder Abuse Prevention & Prosecution Act, the Task Force will be redoubling its law enforcement training and community outreach efforts in the coming months.
As part of this work, the Middle District of Tennessee has launched an Elder Justice Task Force page on its website. The page contains an overview of the Department of Justice’s Elder Justice Initiative, links to elder justice resources provided by our State partners in Tennessee, resources for victims seeking legal assistance, and a list of recent elder fraud and abuse matters resolved in the Middle District of Tennessee.
Anyone wishing to report elder fraud and abuse should complete the Elder Justice Complaint Form on the Elder Justice Task Force webpage, and submit the completed form to [email protected], or mail it to our Nashville Office, Attn: Elder Justice Coordinator.
Miami-Area Man Sentenced to Five Years in Prison for Role in $63 Million Health Care Fraud SchemeRead the Press Release
A Miami-area man was sentenced to 60 months in prison today for his role in a $63 million health care fraud scheme involving a now-defunct community mental health center located in Miami that purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Special Agent in Charge Robert Lasky of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Samuel Konell, 70, of Boca Raton, Florida, was sentenced by U.S. District Judge Jose E. Martinez of the Southern District of Florida. Judge Martinez also ordered Konell to pay $9,921,726 in restitution and to forfeit certain substitute assets, including several pieces of jewelry, in partial satisfaction of a personal money judgment entered against the defendant in the amount of $432,829. Konell pleaded guilty on Nov. 21, 2017, to one count of conspiracy to defraud the United States and receive health care kickbacks.
As part of his guilty plea, Konell admitted that from approximately January 2006 through June 2012, he received kickbacks and/or bribes in return for referring Medicare beneficiaries from the Miami-Dade state court system to Greater Miami Behavioral Healthcare Center Inc. (Greater Miami) to serve as patients. He admitted that he coordinated with criminal defendants in the state court system to obtain court orders for mental health treatment in lieu of incarceration so that he could refer those individuals to Greater Miami to serve as patients in return for kickbacks and/or bribes. Konell further admitted that he did so knowing that certain of those individuals were not mentally ill or otherwise did not meet the criteria for PHP treatment.
In addition, Konell admitted that he and his co-conspirators at Greater Miami took steps to disguise the true nature of the kickbacks and/or bribes that Greater Miami paid to Konell and other patient brokers. Specifically, Konell was placed on the Greater Miami payroll to make the kickbacks and/or bribes appear as though they were legitimate salary payments, he admitted. Konell further admitted that he was originally paid a flat monthly rate that was based on the number of patients he referred to Greater Miami from the state court system, and when Konell referred more patients to Greater Miami, his co-conspirators found ways to pay him over and above his regular kickback payments, including by providing him with holiday bonuses.
In furtherance of the kickback conspiracy, Konell made representations to judges and others in the Miami-Dade state court system that the individuals he referred to Greater Miami received medically necessary PHP services from Greater Miami when in reality such services were not always needed, he admitted.
According to plea documents, Konell’s co-conspirators caused the submission of over $63 million in false and fraudulent claims to Medicare. These claims were based on kickbacks and/or bribes paid to Konell and others and were for services that were medically unnecessary, were not eligible for Medicare reimbursement or were never provided by Greater Miami. Konell admitted that his participation in the Greater Miami scheme resulted in the submission of claims to Medicare totaling between at least approximately $9.5 and $25 million.
Eleven other individuals have pleaded guilty and have been sentenced for their roles in the scheme, including the owner of Greater Miami, three administrators and seven patient brokers.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. Former Senior Trial Attorney Christopher J. Hunter and Trial Attorneys Elizabeth Young and Leslie Wright of the Fraud Section prosecuted the case. Assistant U.S. Attorney Adrienne Rosen of the Southern District of Florida is handling the forfeiture aspects of the case.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
Miami-Area Man Sentenced to Five Years in Prison for Role in $63 Million Health Care Fraud SchemeRead the Press Release
A Miami-area man was sentenced to 60 months in prison today for his role in a $63 million health care fraud scheme involving a now-defunct community mental health center located in Miami that purported to provide partial hospitalization program (PHP) services to individuals suffering from mental illness.
U.S. Attorney Benjamin G. Greenberg of the Southern District of Florida, Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division, Special Agent in Charge Robert Lasky of the FBI’s Miami Field Office and Special Agent in Charge Shimon R. Richmond of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Miami Regional Office made the announcement.
Samuel Konell, 70, of Boca Raton, Florida, was sentenced by U.S. District Judge Jose E. Martinez of the Southern District of Florida. Judge Martinez also ordered Konell to pay $9,921,726 in restitution and to forfeit certain substitute assets, including several pieces of jewelry, in partial satisfaction of a personal money judgment entered against the defendant in the amount of $432,829. Konell pleaded guilty on Nov. 21, 2017, to one count of conspiracy to defraud the United States and receive health care kickbacks.
As part of his guilty plea, Konell admitted that from approximately January 2006 through June 2012, he received kickbacks and/or bribes in return for referring Medicare beneficiaries from the Miami-Dade state court system to Greater Miami Behavioral Healthcare Center Inc. (Greater Miami) to serve as patients. He admitted that he coordinated with criminal defendants in the state court system to obtain court orders for mental health treatment in lieu of incarceration so that he could refer those individuals to Greater Miami to serve as patients in return for kickbacks and/or bribes. Konell further admitted that he did so knowing that certain of those individuals were not mentally ill or otherwise did not meet the criteria for PHP treatment.
In addition, Konell admitted that he and his co-conspirators at Greater Miami took steps to disguise the true nature of the kickbacks and/or bribes that Greater Miami paid to Konell and other patient brokers. Specifically, Konell was placed on the Greater Miami payroll to make the kickbacks and/or bribes appear as though they were legitimate salary payments, he admitted. Konell further admitted that he was originally paid a flat monthly rate that was based on the number of patients he referred to Greater Miami from the state court system, and when Konell referred more patients to Greater Miami, his co-conspirators found ways to pay him over and above his regular kickback payments, including by providing him with holiday bonuses.
In furtherance of the kickback conspiracy, Konell made representations to judges and others in the Miami-Dade state court system that the individuals he referred to Greater Miami received medically necessary PHP services from Greater Miami when in reality such services were not always needed, he admitted.
According to plea documents, Konell’s co-conspirators caused the submission of over $63 million in false and fraudulent claims to Medicare. These claims were based on kickbacks and/or bribes paid to Konell and others and were for services that were medically unnecessary, were not eligible for Medicare reimbursement or were never provided by Greater Miami. Konell admitted that his participation in the Greater Miami scheme resulted in the submission of claims to Medicare totaling between at least approximately $9.5 and $25 million.
Eleven other individuals have pleaded guilty and have been sentenced for their roles in the scheme, including the owner of Greater Miami, three administrators and seven patient brokers.
This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Southern District of Florida. Former Senior Trial Attorney Christopher J. Hunter and Trial Attorneys Elizabeth Young and Leslie Wright of the Fraud Section prosecuted the case. Assistant U.S. Attorney Adrienne Rosen of the Southern District of Florida is handling the forfeiture aspects of the case.
The Medicare Fraud Strike Force operations are part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. The Medicare Fraud Strike Force operates in nine locations nationwide. Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 3,500 defendants who collectively have falsely billed the Medicare program for over $12.5 billion.
Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.
Mi Salud Program Technician Sentenced to Four Years in Prison in Bribery and Health Care Fraud CaseRead the Press Release
SAN JUAN, P.R. – On February 22, 2018, defendant Karen Curet-Nieves was sentenced to a term of 48 months (four years) of imprisonment, and two years of supervised release term by District Judge Pedro A. Delgado for her participation in a bribery and health care fraud scheme that occurred from approximately July 2014 through October 2015 at the Programa de Asistencia Médica office in Santurce, Puerto Rico, announced Rosa Emilia Rodríguez-Vélez, United States Attorney for the District of Puerto Rico. Curet-Nieves was also ordered to pay restitution in an amount of twenty thousand dollars ($20,000) to the United States Department of Health and Human Services and to complete 100 hours of community service. Curet-Nieves previously entered a guilty plea to three separate counts charging her with bribery, conspiracy to commit health care fraud, and aggravated identity theft in violation of 18 U.S.C. §§ 666(a)(1)(B), 1347, 1349, and 1028A.
Curet-Nieves was a Program Technician at the Programa de Asistencia Médica office in Santurce who evaluated and determined eligibility of Mi Salud applicants, input data in the Medicaid Integrated Technology Initiative (“MEDITI”) system, and fraudulently approved Mi Salud benefits for otherwise ineligible participants in exchange for cash payments. The fraudulent enrollment of these health plan participants caused federal funds to be paid to Managed Care Organizations for monthly premiums and utilization of the health care plans.
Curet-Nieves received the names, Social Security numbers, birth dates, and addresses of individuals from co-conspirators for purposes of fraudulently enrolling individuals into the health care benefit programs. In exchange for a cash bribe, Curet-Nieves fraudulently enrolled individuals into the Mi Salud health care benefits program with the MEDITI database without conducting an interview and without determining the individual’s eligibility. Curet-Nieves approved twenty to thirty unqualified individuals per week into the Mi Salud program for a payment of $10.00 each.
On February 24, 2016, a Federal grand jury indicted Curet-Nieves, two other agents of the Programa de Asistencia Médica, and five additional individuals that participated in this bribery and health care fraud scheme. Luis González-Cordova, a clerk in the Santurce office, pled guilty on August 25, 2016 to bribery, conspiracy to commit health care fraud, and aggravated identity theft in violation of 18 U.S.C. § 666(a)(1)(B), 1347, 1349, and 1028A. González-Cordova was sentenced on May 26, 2017, to twenty-four (24) months and one day of imprisonment and ordered to pay twenty thousand dollars ($20,000) in restitution to the United States Department of Health and Human Services.
Orlando Negrón-Bonilla, a program technician in the Santurce office, pled guilty on November 9, 2016 to aggravated identity theft in violation of 18 U.S.C. § 1028A. Negrón-Bonilla was sentenced on March 17, 2017 to twenty-four (24) months of imprisonment and ordered to pay twenty thousand dollars ($20,000) in restitution to the United States Department of Health and Human Services.
The remaining five individuals, Ruben Escalera-Rivera, Perfecto De León-Toribio, Luis Caceres-De León, Luis Ángel García-Rosa, and Andrea Jiménez-De Jesús, acted as “runners,” soliciting and referring individuals to González-Cordova for their fraudulent entry into the Medicaid health care benefit programs. Each entered guilty pleas to conspiracy to commit health care fraud, a felony, in violation of 18 U.S.C. §§ 1347, 1349.
The runners would recruit individuals to be fraudulently enrolled into the Medicaid health care benefits programs in exchange for cash bribes and monetary payments without personally meeting with the individuals to determine their eligibility as required by PR-DOH procedures. The runners delivered cash bribes to González-Cordova and upon receiving the personal identification information, including names, social security numbers, dates of birth, and addresses, from the runners, González-Cordova would provide it to Curet-Nieves or Negrón-Bonilla by text or handwritten note for entry into the MEDITI database. Curet-Nieves and Negrón-Bonilla fraudulently certified the participants as eligible to receive Medicaid health care benefits.
The Medicaid Program (“Medicaid”) is a federal health benefit program intended to provide benefits to low-income individuals and families. Medicaid is monitored and funded by the United States Department of Health and Human Services (“HHS”) through its agency, the Centers for Medicare and Medicaid Services (“CMS”). In the Commonwealth of Puerto Rico, Medicaid is referred to in Spanish as “Mi Salud,” or “Plan de Salud del Gobierno” (PSG). Mi Salud beneficiaries included Medicaid participants and “state only funded health care recipients,” commonly referred to as “Commonwealth participants.” An individual’s eligibility for Medicaid or Commonwealth health care benefits depends on certain eligibility requirements.
The investigation was led by the U.S. Department of Health and Human Services-Office of Inspector General, with the collaboration of the Federal Bureau of Investigation, United States Secret Service, United States Postal Inspection Service, and the Puerto Rico Department of Health Medicaid Anti-Fraud Unit, and prosecuted by Assistant U.S. Attorney Seth A. Erbe.
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Mexican National Sentenced for Immigration and Firearm OffensesRead the Press Release
On February 22, 2018, Edwin Vergara-Cedillo, 32, a citizen of Mexico, was sentenced to a term of 18 months of imprisonment, Donald S. Boyce, United States Attorney for the Southern District of Illinois, announced today. Vergara-Cedillo pled guilty on November 7, 2017 to two federal charges, illegal reentry after deportation and possession of a firearm by an illegal alien. Vergara-Cedillo was sentenced to 18 months on each count, to be served concurrently.
At his change of plea hearing in November, Vergara-Cedillo admitted that he was an illegal alien and that he had been previously deported to Mexico. He also admitted that he had unlawfully possessed a handgun and ammunition at the time of his arrest.
Vergara-Cedillo was arrested by O’Fallon, Illinois police on July 2, 2017 for violating an order of protection. Police found and seized a handgun and ammunition from the console of the car which Vergara-Cedillo was driving. Vergara-Cedillo has been continuously confined in federal custody since his arrest in July.
The investigation which resulted in Vergara-Cedillo’s arrest and conviction was conducted by the O’Fallon, Illinois Police Department and by the Immigration and Customs Enforcement Agency (ICE). The case was prosecuted by Assistant United States Attorney Robert L. Garrison.
Mexican Man Sentenced to Prison for Possession of Fraudulent Identification DocumentsRead the Press Release
A Mexican man who unlawfully possessed fraudulent identification documents was sentenced today to more than two months in federal prison.
Aldair Rodriguez, age 23, a citizen of Mexico unlawfully present in the United States and residing in Albuquerque, New Mexico, received the prison term after a January 3, 2018, guilty plea to unlawful possession of identification documents.
At the guilty plea, Rodriguez admitted he knowingly possessed fraudulent identification cards, specifically a social security card and a permanent resident card. These types of cards are prescribed by law as evidence of authorized stay or employment in the United States. The identification cards bore an alias name and the government-issued numbers on the cards belonged to other persons. The cards were found on October 22, 2017, during a search incident to arrest by the Cedar Falls Police Department on a state criminal charge.
Rodriguez was sentenced in Cedar Rapids by United States District Court Chief Judge Leonard T. Strand. Rodriguez was sentenced to 73 days’ imprisonment. He must also serve a one-year term of supervised release after the prison term. There is no parole in the federal system.
Rodriguez is being held in the United States Marshal’s custody until he can be turned over to immigration officials.
The case was prosecuted by Assistant United States Attorney Daniel C. Tvedt and investigated by the Department of Homeland Security, Immigration and Customs Enforcement, Enforcement and Removal Operations.
Court file information at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.
The case file number is 17-CR-2087.
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Memphis, Tennessee, Man Pleads Guilty to Marijuana DistributionRead the Press Release
MUSKOGEE, OKLAHOMA – The United States Attorney’s Office for the Eastern District of Oklahoma announced that Chad Scates Tidwell, age 32, of Memphis, Tennessee pled guilty to Possession With Intent To Distribute Marijuana, in violation of Title 21, United States Code, Sections 841(a)(1) and 841(b)(1)(C), punishable by not more than 20 years imprisonment, up to a $1,000,000.00 fine, or both.
The Indictment alleged that on or about December 4, 2017, within the Eastern District of Oklahoma, the defendant, did knowingly and intentionally possess with intent to distribute 50 kilograms or more of a mixture or substance containing a detectable amount of marijuana, a Schedule I controlled substance.The charges arose from an investigation by the Oklahoma Highway Patrol and the Drug Enforcement Administration.
The Honorable Kimberly E. West, U.S. Magistrate Judge in the United States District Court for the Eastern District of Oklahoma, in Muskogee, accepted the plea and ordered the completion of a presentence investigation report.
Assistant United States Attorney Timothy Hammer represented the United States.
Matthew Krueger Becomes United States Attorney for the Eastern District of WisconsinRead the Press Release
Matthew D. Krueger has taken the oath of office to become the United States Attorney for the Eastern District of Wisconsin. United States Attorney Krueger was nominated by President Donald Trump and confirmed by the U.S. Senate on February 15th. He took the oath of office from Chief United States District Judge William C. Griesbach this afternoon.
“It is truly an honor to serve as the United States Attorney for the Eastern District of Wisconsin,” said United States Attorney Krueger. “I am looking forward to working with the men and women of the United States Attorney’s Office and continuing our strong partnerships with local, state, and federal officials. Our community faces serious problems, including violent crime, too many deaths from opioids, human trafficking, and various fraud schemes. Working together with federal, state, and local partners, we’ll seek to improve the quality of life in eastern Wisconsin.”
As United States Attorney, Mr. Krueger is the top-ranking federal law enforcement official in the Eastern District of Wisconsin. The Eastern District consists of the 28 counties in the eastern portion of the state, and includes the cities of Milwaukee, Green Bay, Racine, Kenosha, Sheboygan, Oshkosh, and Appleton. He will oversee a staff of 77 employees, including 41 attorneys and 36 support personnel. The office is responsible for prosecuting federal crimes in the district, including crimes related to terrorism, firearms, narcotics, child exploitation, human trafficking, financial fraud, healthcare fraud, and public corruption. The office also represents the United States in affirmative and defensive civil cases, and collects debts owed to the United States.
Before taking office, United States Attorney Krueger was an Assistant United States Attorney in the Eastern District of Wisconsin. He has served in that role since 2013, first in the Civil Division and then in the Criminal Division. He prosecuted a variety of federal crimes, including firearm offenses, health care fraud, and other financial crimes. United States Attorney Krueger previously worked as an associate at Sidley Austin LLP in Washington, DC. He also served as a Bristow Fellow in the U.S. Department of Justice, Office of the Solicitor General. He clerked for the Honorable Paul V. Niemeyer of the United States Court of Appeals for the Fourth Circuit.
United States Attorney Krueger received his B.S., with honors, from the University of Wisconsin-Madison, and his J.D., summa cum laude, from the University of Minnesota Law School where he served as Editor in Chief of the Minnesota Law Review.
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Maryland man guilty of selling heroin in Berkeley County, West VirginiaRead the Press Release
MARTINSBURG, WEST VIRGINIA –Christopher Wigfall, also known as “Frank,” of Randallstown, Maryland, was found guilty today by a jury of selling heroin in the Eastern Panhandle, United States Attorney Bill Powell announced.
Wigfall, age 38, was found guilty of two counts of “Distribution of Heroin,” and one count of “Possession with the Intent to Distribute Heroin.” Wigfall sold heroin in December 2014 in Berkeley County.
The trial began on Tuesday, February 20, 2018. The jury deliberated for less than two hours this morning before returning the guilty verdicts.
Wigfall is also facing an additional count of “Unlawful Possession of a Firearm.” He is accused of illegally possessing a .40 caliber pistol in March 2015 in Berkeley County. Wigfall is scheduled to go to trial on the firearm charge in March 2018.
Wigfall faces up to 20 years incarceration and a fine of up to $1,000,000 for each count. Under the Federal Sentencing Guidelines, the actual sentence imposed will be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.
Assistant U.S. Attorney Anna Z. Krasinski and Special Assistant U. S. Attorney Elizabeth D. Grant, also with the West Virginia Attorney General’s Office, prosecuted the case on behalf of the government. The Bureau of Alcohol, Tobacco, Firearms and Explosives and the Eastern Panhandle Drug & Violent Crimes Task Force, a HIDTA-funded initiative, investigated.
Chief U.S. District Judge Gina M. Groh presided.
Maryland Man Pleads Guilty to Sending Threats Using FacebookRead the Press Release
Jacksonville, Florida – Seyed Ali Soroushjou (38, Cockeysville, Maryland) has pleaded guilty to sending threatening communications online via Facebook. He faces a maximum penalty of five years in federal prison; a sentencing date has not yet been set. Soroushjou has been in federal custody since his arrest.
According to court documents, on August 29, 2016, a Jacksonville resident (Person A) contacted law enforcement to report that she had received threatening messages through Facebook from an individual she did not know who had identified himself by the user name “MobyDick NahanghaVahshi.” A subsequent investigation identified the user as Soroushjou and revealed that he had sent the messages in response to a photograph that Person A had posted on her Facebook page of her posing with three officers from the New York Police Department. In his first message to the victim, sent on August 24, 2016, Soroushjou threatened to assault the officers depicted in the photo. In a second message three days later, Soroushjou graphically stated that he intended to sexually assault Person A.
Following the execution of a search warrant at Soroushjou’s home in Maryland, he was arrested. Agents also seized three computer devices that he had used to access Person A’s Facebook account.
This case was investigated by the FBI. It is being prosecuted by Assistant United States Attorney D. Rodney Brown.
Major Gang Arrests Highlight Pioneering Collaborative State, Local, and Federal Violence Reduction InitiativesRead the Press Release
LITTLE ROCK—Multiple gang members are among the dozens of individuals arrested in a major law enforcement operation targeting violent criminals in central Arkansas. Thursday’s early-morning takedown highlights the coordinated work of federal, state, and local agencies to combat drug and gun crime in Little Rock, and is part of both new and continuing efforts by all law enforcement in the area to address the rise in violent crime.
Cody Hiland, United States Attorney for the Eastern District of Arkansas, and Stephen G. Azzam, Special Agent in Charge of the New Orleans Field Office of the Drug Enforcement Administration (DEA), announced today’s arrests, as well the unsealing of 13 indictments and two complaints charging 49 individuals with dozens of federal gun and drug-trafficking crimes. The indictments were presented as part of a collaborative violent-crime reduction initiative in the greater Little Rock area.
The overall operation, led by the DEA and assisted by the FBI, resulted in 21 people arrested on Thursday morning and is the product of the combined efforts of the law enforcement agencies comprising the GET Rock task force. Early Thursday morning hundreds of officers from multiple agencies executed arrest warrants for the charged suspects. Nine defendants remain fugitives. Included in the arrests were multiple members of Little Rock’s two dominant gangs—Bloods and Crips. Agents also executed 11 search warrants, which resulted in agents seizing 21 illegally possessed guns, body armor, 9.6 pounds of cocaine, 4 ounces of methamphetamine, 7.2 ounces of crack cocaine 12 ounces of marijuana, 5 grams of heroin, 293 ecstasy pills, and 93 pint bottles of promethazine cough syrup. Agents also seized approximately $50,000 in drug proceeds, 4 cars, and 1 motorcycle.
This operation is part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement and the communities they serve to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions reinvigorated PSN in 2017 as part of the Department’s renewed focus on targeting violent criminals, directing all U.S. Attorney’s Offices to work in partnership with federal, state, and local law enforcement and the local community to develop effective, locally-based strategies to reduce violent crime.
“Gangs use violence to try to assert a false sovereignty over our neighborhoods, but they will fail,” Attorney General Sessions said. “The Department of Justice is committed to reducing violent crime in America. That’s why we have restored our Project Safe Neighborhoods program, which customizes our crime reduction strategy in each of our 94 U.S. Attorney districts. Federal, state, and local law enforcement in Arkansas has prioritized dismantling gangs—and together we are producing results. Today’s arrests are the next steps toward taking back our streets.”
Hiland made clear that the people arrested in this operation are the type of criminal he is most determined to remove from our communities.
“A team of over 250 agents and officers from law enforcement agencies across our state came together this morning to begin the process of dismantling violent gangs and removing dangerous people from the streets, with the goal of making our community a safer place,” Hiland said. “These agents also took drugs and violent people off the street today—people we believe endanger the lives of law-abiding citizens and endanger the future of our children with their toxic influence. Since I took this position, I have said that targeting violent offenders will be a priority for this office, and we are committed to that priority. Today’s operation is a victory over gang, gun, and drug violence, but is just the start of what the combined resources of these law enforcement agencies can do.”
“These arrests should serve as a warning and send a clear message—we will relentlessly pursue these violent criminals and drug traffickers plaguing our communities and bring them to justice,” Special Agent in Charge Azzam said. “Our neighborhoods deserve to exist without fear and intimidation inflicted by violent drug gangs. These dangerous criminals arrested today were responsible for infesting our communities with more than drugs—they also threatened our citizens with guns and violence. The DEA stands here today with our federal, state, and local law enforcement partners, confident that we have dismantled these violent drug trafficking organizations and made the streets in these communities a safer place to live.”
The DEA served as lead agency while working in conjunction with GET (Gang Enforcement Task Force) Rock during the operation. GET Rock was formed at the request of Arkansas Governor Asa Hutchinson in response to the escalation in gang and gun violence in Little Rock, highlighted by the July 1, 2017, mass shooting at the Power Ultra Lounge in Little Rock that injured 28 people. Nine central Arkansas law enforcement agencies—the U.S. Attorney’s office, FBI, DEA, Bureau of Alcohol, Tobacco, Firearms & Explosives (ATF), U.S. Marshal’s Service, Little Rock Police Department (LRPD), Pulaski County Sherriff’s Office (PCSO), Arkansas State Police (ASP), and Arkansas Community Correction—comprise GET Rock, which is coordinated out of the FBI Little Rock field office and continues to serve as the clearinghouse for all gang-related law enforcement actions in Little Rock.
“With these arrests and indictments, we are serving notice that Arkansas will not tolerate the reign of terror by those who traffic in illegal drugs, illegal guns, and rule by intimidation,” Governor Hutchinson said. “I applaud the work of all of the agencies who participated in this investigation and dangerous round-up of suspects. Our newly formed GET Rock team has demonstrated that cooperation across agencies at all levels is an effective approach to identifying and apprehending gang members and others who threaten the lives of our citizens. These officers have taken great risks on our behalf, and I thank them on behalf of all those whose neighborhoods are a little safer today.”
“Violent street gangs, including the Wolfe Street Crips and the Monroe Street Hustlers, have a long history of crime and violence in the Little Rock community,” FBI Little Rock Field Office Special Agent in Charge Diane Upchurch said. “We are determined to hold accountable these individuals who have paralyzed our community. We appreciate and applaud the efforts of this amazing team of law enforcement agencies.”
Little Rock Mayor Mark Stodola, a former prosecutor, praised the city’s law enforcement officers in the successful operation.
“The impact of today’s arrests will go a long way toward bringing safety back to the streets of Little Rock,” Mayor Stodola said. “Our citizens deserve to live without fear, without the nightly crack of gunfire piercing the darkness of night. Drugs and guns are a deadly mix which often ends in a homicide. Those who insist on mixing the two with criminal activity must be taken off the streets. Our thanks to the 250 law enforcement officers from our federal, state and local law enforcement agencies who, with the actions taken today, are making our streets safer.”
Hiland announces new program designed to produce more federal prosecutions
On Thursday, the heads of federal, state, and local law enforcement agencies attended a press conference announcing these arrests, during which time Hiland also announced a major PSN initiative his office is implementing that is designed to marshal the combined resources of federal and state law enforcement to remove violent, repeat criminals from the streets of central Arkansas.
Overall, violent crime increased approximately 5.52% from 2016 to 2017 in Little Rock, including increases in homicides, rapes, and burglaries. The largest increase was in the number of aggravated assaults, which jumped from 2,229 in 2016 to 2,556 in 2017. Guns are used in a vast majority of these assaults.
At the press conference, Hiland introduced Joann Rhodes, a Little Rock grandmother who was nearly killed last Friday afternoon when a bullet pierced her windshield inches from her head while she was driving on 12th Street in Little Rock. Rhodes also lost a son to gun violence four years ago.
“In response to a continued spike in violent crime, the Little Rock Police Department joined resources with our local, state and federal partners,” LRPD Chief Kenton Buckner said. “Our collective efforts have resulted in a significant takedown of many individuals responsible for crimes in our community. Little Rock is grateful to everyone who has assisted to keep the capital city safe. We remain committed to pursuing the individuals responsible for heinous crimes in our city.”
Recognizing the need to address the acute and immediate threat that gun violence is having on our communities—which includes people like Ms. Rhodes—Hiland seeks to use the full force of his office and federal firearms statutes, which provide significant punishment for repeat offenders and felons who possess guns. Without similar punishments in the state system, it is prosecution in the federal system—which has no parole—that provides a recognizable deterrent for these violent criminals.
“To those who have held our communities hostage to your violence, to those who have declared war in our neighborhoods with little fear of retribution, we are coming for you,” Hiland said. “We will seek your removal by any means available to me under federal law. The announcement of this program is your warning—my office, along with the shared resources of all of our local, state, and federal partners—stands ready to do what needs to be done to take you off the streets, and make our communities safer places. Everyone in the law enforcement community shares this goal.”
Under this PSN initiative, the Eastern District of Arkansas will greatly increase its capacity to federally prosecute violent crimes involving guns and drugs by enlisting the help of attorneys currently working for various state offices. These attorneys will be deputized as Special Assistant United States Attorney’s (SAUSAs) and given authority to prosecute cases in federal court.
Six county prosecuting attorney’s offices (Pulaski, Faulkner, Saline, Jefferson, Lonoke, and White) have offered prosecutors to assist in federal court. Additionally, the Attorney General’s office and the Governor’s office have volunteered attorneys to serve as SAUSAs. In total, approximately 13 SAUSAs will initially serve the Eastern District of Arkansas, allowing the office to prosecute far more cases in federal court.
Hiland’s office has already begun increasing its caseload. In December and January, the U.S. Attorney’s office opened approximately 50 new gun cases, many of which originated with an arrest by a local police department. Thus far in February the office is reviewing another 20 gun cases, and Hiland pledges to work with the Pulaski County prosecutor’s office to review every gun arrest that occurs in Pulaski County for potential federal prosecution.
“I am proud to join U.S. Attorney Cody Hiland in the important fight against violent crime,” Arkansas Attorney General Leslie Rutledge said. “The addition of Special Assistant United States Attorneys will help law enforcement curtail unnecessary violence and lock criminals up for the gun crimes they commit. No Arkansan should live in fear and I am confident that prosecuting and removing dangerous criminals from our streets will make our neighborhoods safer.”
“This initiative will enhance coordination and cooperation among the local, state, and federal agencies tasked with keeping our communities safe, and in reducing gun violence in particular,” Pulaski County Prosecutor Larry Jegley said. “I can say with confidence that prosecutors throughout the counties of the Eastern District of Arkansas welcome this outreach effort and will put it to good use for the public we serve. The violence on our streets must stop, and this is a terrific effort to that end.”
Hiland’s gun initiative would not be possible without the assistance of both the local prosecuting attorney’s offices and the local police departments, as well as federal partners such as the ATF. Many of the cases these SAUSAs will prosecute in federal court will begin with arrests by the LRPD, PCSO, North Little Rock Police Department and the Arkansas State Police, and then move into the federal system with the help of the ATF. The ATF will provide expertise and the logistical and technical support of special agents to allow cases that began with state arrests to proceed in the federal system.
“ATF remains committed to the detection, investigation, and prosecution of individuals who would illegally possess and utilize firearms in crimes of violence,” ATF Little Rock Resident Agent in Charge Jeff Reed said. “We applaud this new effort to enforce federal gun laws on violent criminals who want to take the law into their own hands. ATF will work in lockstep with the United States Attorney’s Office to accomplish the removal of the threat posed by those individuals who would enforce their will upon the citizens of Arkansas by illegally possessing and using of firearms.”
The new SAUSAs are expected to begin prosecuting federal cases in the coming weeks. On Thursday, thirty-one of the 49 defendants included in the operation are charged in two indictments. In 2017, law enforcement identified Clifton Thomas and Marvin Collins as founders of a local Bloods-affiliated gang, Real Hustlers Incorporated (RHI). The gang, known to frequent the area of Monroe and Brown Streets in Little Rock, started as the Monroe Street Hustlers and changed its name to RHI due to mounting and unwanted attention from the LRPD. RHI, which promotes itself as an organization for rap artists, utilizes 5108 31st Street in Little Rock as a music studio, and as a location for distribution of heroin, cocaine, marijuana, oxycodone, and other controlled substances.
The mass shooting at Power Ultra Lounge was precipitated by the rivalry between RHI and the Wolfe Street Crips, which is a local Crips-affiliated gang in Little Rock. Police identified various RHI members as having participated in the Power Ultra Lounge shooting, and in subsequent retaliatory shootings involving Dewquan Johns, James Langford, Rodney Scott, Damien Young, and Edmond Blue (all of whom are indicted as part of this operation), among several others.
The DEA, using court-authorized wiretaps of various phones, identified gang members and the drug and gun crimes the gang was committing. Charges in the Thomas indictment include conspiracies to distribute cocaine, heroin, and marijuana, felon in possession of firearms, and possession of firearms in furtherance of drug trafficking. Included among the defendants is Bilal Johns Muhammad, identified as a long-time leader in RHI, and formerly the Monroe Street Hustlers. Two of Bilal Johns Muhammad’s sons—Bilal Sean Muhammad and Kain Jordan—were also indicted in the case.
The DEA and GET Rock also identified another 18 defendants as part of a drug trafficking organization headed by Robert Turpin III. The investigation revealed that Turpin was distributing ounce quantities of methamphetamine, cocaine, heroin, and marijuana, as well as thousands of oxycodone and alprazolam (Xanax) pills in the central Arkansas area. Turpin was found to be importing pharmaceutical drugs from India for illicit distribution, and during the course of the conspiracy more than 150,000 pills were obtained and distributed.
Furthermore, the Turpin organization was responsible for the transportation and distribution of methamphetamine, cocaine, heroin, marijuana, pharmaceutical controlled substances and money to and from Texas, Massachusetts, and North Carolina using personal and commercial vehicles, the United States Postal Service and FedEx. This organization also trafficked in firearms and has engaged in firearm-related violence in the Little Rock area. Law enforcement agents carried out the operation that resulted in the arrests of 15 of the 18 indicted members of the Turpin organization on February 14, 2018.
Also arrested Thursday morning was Chris Alexander, a member of the Wolfe Street Crips and purported community activist who has promoted anti-gang and violence programs in Little Rock in the past. Alexander, along with fellow gang member Kenya Davis, who is still a fugitive, was indicted on marijuana conspiracy and distribution charges. Alexander was also charged with being a felon in possession of firearms and possession of firearms in furtherance of drug trafficking.
These cases were investigated by the DEA Little Rock District Office Task Force Group 2—composed of DEA special agents and task force officers from the ASP, PCSO, Jefferson County Sheriff’s Office, Saline County Sheriff’s Office, and Benton Police Department. Also involved in the investigation was FBI, ATF, United States Marshals Service, LRPD, North Little Rock Police Department, Arkansas Community Corrections, and the Arkansas National Guard Counter-Drug Task Force. Assistant United States Attorney Anne Gardner is heading the prosecution of these cases.
An indictment or complaint contains only allegations. A defendant is presumed innocent unless and until proven guilty.
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This news release, as well as additional information about the office of the
United States Attorney for the Eastern District of Arkansas, is available on-line athttp://www.justice.gov/edar
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Defendant List Thomas Filed Indictment Turpin Filed Indictment
@EDARNEWSLouisville Financial Planner Charged During Nationwide Elder Fraud Sweep of More Than 250 DefendantsRead the Press Release
Justice Department coordinates largest nationwide elder fraud sweep – more than one million victims
Louisville financial planner allegedly defrauded mostly elderly customers of over $800,000
LOUISVILLE, Ky. – United States Attorney Russell M. Coleman announced today the grand jury indictment this week, of a Louisville financial advisor, charged with multiple counts of investment advisor fraud, money laundering, aggravated identity theft, and wire fraud. Today’s announcement is part of the largest coordinated sweep of elder fraud cases in history.
The cases involve more than two hundred and fifty defendants from around the globe who victimized more than a million Americans, most of whom were elderly. The cases include criminal, civil, and forfeiture actions across more than 50 federal districts. Of the defendants, 200 were charged criminally. In each case, offenders engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused losses of more than half a billion dollars.
In the Western District of Kentucky, Derek Payne Burcham, 34, who was the former principal owner of Cornerstone Benefit Advisors, LLC., was charged with fraudulently obtaining over $800,000 by misappropriating monies that investors had provided to Cornerstone to invest, then using those funds to support his lifestyle and to cover operating expenses.
Specifically, between 2011 and August of 2016, Burcham, as Cornerstone’s sole investment adviser representative, had a fiduciary duty to act in his clients’ best interests. During that time, Burcham is alleged to have made numerous false statements, assurances, and representations to clients regarding the nature of their investments. Further, Burcham is alleged to have posted and solicited business through false advertising; induced clients to provide him access to their accounts at brokerage and financial planning companies; forged client signatures on official investment documents; charged unearned advisory fees and repeatedly concealed those over-charged advisory fees; and between 2012 and August of 2016, allegedly reported to the Kentucky Department of Financial Institutions his maximum advisory fee charged by Cornerstone was 1%, when the unearned investment advisory fees from client accounts were in excess of the 1%.
This case is being prosecuted by Assistant United States Attorney Lettricea Jefferson-Webb and is being investigated by the United States Secret Service (USSS), the Kentucky Department of Financial Institutions, the Internal Revenue Service Criminal Investigation, and Louisville Metro Police Department.
This morning in Washington, Attorney General Jeff Sessions was joined in the announcement of the elder fraud national sweep, by FBI Acting Deputy Director David Bowdich; Chief Postal Inspector Guy Cottrell; FTC Acting Chairman Maureen Ohlhausen; and Kansas Attorney General and President of the National Association of Attorneys General Derek Schmidt.
“The Justice Department and its partners are taking unprecedented, coordinated action to protect elderly Americans from financial threats, both foreign and domestic,” said Attorney General Sessions. “Today’s actions send a clear message: we will hold perpetrators of elder fraud schemes accountable wherever they are. When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains. Today is only the beginning. I have directed Department prosecutors to coordinate with both domestic law enforcement partners and foreign counterparts to stop these criminals from exploiting our seniors.”
The actions charged a variety of fraud schemes, ranging from mass mailing, telemarketing and investment frauds to individual incidences of identity theft and theft by guardians. A number of cases involved transnational criminal organizations that defrauded hundreds of thousands of elderly victims, while others involved a single relative or fiduciary who took advantage of an individual victim. The schemes charged in these cases caused losses to more than a million victims.
“Winners. That’s what so many of the people who received these solicitations in the mail thought they were. But they’re not. They are victims of scams that Postal Inspectors have seen and investigated for decades. In fact, some of the same operators we encountered 20 years ago are back. But so are we. Yesterday, Postal Inspectors around the country executed search warrants on 14 locations that some of these same operators used to run their scams. We’re letting the American public know – and especially our vulnerable older Americans – that Postal Inspectors are working hard to protect them and ensure their confidence in the U.S. Mail,” said Chief Postal Inspector Cottrell.
“Over the last year, the FBI has initiated more than 200 financial crimes cases involving elderly victims who were devastated financially, emotionally, mentally and physically. Picking up the pieces of these fraud schemes can be equally as traumatizing for the caregivers of these elderly victims,” said Acting Deputy Director Bowdich. “The FBI reminds seniors and their caregivers to be vigilant. If any person believes they are the victim of, or have knowledge of fraud involving an elderly person, regardless of the loss amount, they should report it to the FBI.”
Actions against the Mass-mailing Fraud Industry
As part of the initiative, the Department’s Consumer Protection Branch, working with the U.S. Attorney’s Office for the Eastern District of New York and others, brought numerous cases this past week in a coordinated strike against more than 43 mass-mailing fraud operators, including criminal charges against six individuals. In addition, law enforcement agents executed 14 premises search warrants from Las Vegas to south Florida, served numerous asset seizure warrants, and coordinated with the Vancouver Police in Canada, who executed over 20 warrants, including search warrants on business premises.
“The defendants targeted elderly and vulnerable consumers both in the United States and abroad, using U.S. addresses and the U.S. mails to try to legitimize their fraudulent schemes,” said U.S. Attorney for the Eastern District of New York Richard P. Donoghue. “They sold false promises of life-changing prizes that never came true. We will pursue the perpetrators of these mail schemes wherever they are located, and hold them accountable.”
These recently filed cases particularly targeted transnational criminal actors who collectively defrauded at least a million victims out of hundreds of millions of dollars. Indeed, just one of the schemes prosecuted criminally by the Consumer Protection Branch operated from 14 foreign countries to cost American victims more than $30 million. Click here for map showing a transnational, single fraud scheme.
Mass-mailing fraud inflicts hundreds of millions of dollars in losses to elderly U.S. victims each year. Department prosecutors and U.S. Postal Inspectors have taken a comprehensive approach to combatting this fraud, disrupting and prosecuting individuals who manage the schemes, artists who draft the fraudulent solicitations, list brokers who supply victim lists, and individuals who collect victim payments.
Actions against other elder fraud schemes
Prosecutors across the country from the Criminal Division’s Fraud Section, the Consumer Protection Branch and the U.S. Attorney’s Offices have heeded the call to focus resources on elder fraud cases. Over 50 U.S. Attorney’s Offices and Department Components filed elder fraud cases in the last year. Some examples of the elder financial exploitation prosecuted by the Department include:
- “Lottery phone scams,” in which callers convince seniors that a large fee or taxes must be paid before one can receive lottery winnings;
- “Grandparent scams,” which convince seniors that their grandchildren have been arrested and need bail money;
- “Romance scams,” which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose;
- “IRS imposter schemes,” which defraud victims by posing as IRS agents and claiming that victims owe back taxes;
- “Guardianship schemes,” which siphon seniors’ financial resources into the bank accounts of deceitful relatives or guardians.
Many of these cases illustrate how an elderly American can lose his or her life savings to a duplicitous relative, guardian, or stranger who gains the victim’s trust. The devastating effects these cases have on victims and their families, both financially and psychologically, make prosecuting elder fraud a key Department priority.
Public Education
The Department has partnered with Senior Corps, a national service program administered by the federal agency the Corporation for National and Community Service, to educate seniors and prevent further victimization. The Senior Corps program engages more than 245,000 older adults in intensive service each year, who in turn, serve more than 840,000 additional seniors, including 332,000 veterans.
Using its vast network operating in more than 30,000 locations, Senior Corps volunteers will communicate about elder fraud to potential victims across the country and will use their skills, knowledge and experience to educate their peers and caregivers about the most prolific types of schemes and how to avoid them.
Coordination with state officials
Kansas Attorney General Schmidt highlighted the cases filed by state Attorneys General targeting elder frauds within in the sweep period, and he emphasized efforts at the state level to combat elder abuse and protect seniors from fraud and exploitation. He encouraged all of the state Attorneys General to devote enforcement and public education resources to preventing financial exploitation of senior citizens.
Coordination with foreign law enforcement
Exceptional assistance from foreign law enforcement partners amplified the effectiveness of the Department’s initiative. The sweep announced today benefited greatly from the work of the International Mass-Marketing Fraud Working Group (IMMFWG), a network of civil and criminal law enforcement agencies from Australia, Belgium, Canada, Europol, the Netherlands, Nigeria, Norway, Spain, the United Kingdom and the United States. The IMMFWG is co-chaired by the U.S. Department of Justice and FTC, and law enforcement in the United Kingdom, and serves as a model for international cooperation against specific threats that endanger the financial well-being of each member country’s residents. Attorney General Sessions expressed gratitude for the outstanding efforts of the working group, including law enforcement action taken as part of the sweep by the Vancouver Police Department in Canada to halt mass mailing schemes that defrauded hundreds of thousands of elderly victims worldwide.
Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime, which can be reached at www.ovc.gov.
The indictment of a person by a Grand Jury is an accusation only and that person is presumed innocent until and unless proven guilty.
burcham_indictment.pdf
Leader of Guatemalan Drug Trafficking Organization Sentenced to Life in PrisonRead the Press Release
Earlier today, Eliu Elixander Lorenzana-Cordon, 46, previously residing in La Reforma, Guatemala, was sentenced to life in prison following a trial in March 2016, where he was found guilty of conspiring to illegally import into the United States and distribute multi-ton quantities of cocaine.
Acting Assistant Attorney General John P. Cronan of the Justice Department’s Criminal Division and Special Agent in Charge Raymond P. Donovan of the Drug Enforcement Administration’s (DEA) Special Operations Division made the announcement.
The sentence was issued by U.S. District Judge Colleen Kollar-Kotelly of the U.S. District Court for the District of Columbia.
“Lorenzana-Cordon was a leader of a major international drug trafficking organization with close ties to the Sinaloa Cartel, one of the most violent and sophisticated transnational criminal organizations operating in the world today,” said Acting Assistant Attorney General Cronan. “In that capacity, Lorenzana-Cordon was responsible for receiving and distributing tons of cocaine destined for the United States, where it would be sold on our streets, causing untold harm to our communities and the lives of our citizens. This sentence sends an unmistakable message that the Department will continue to relentlessly pursue and prosecute international drug traffickers who endeavor to send drugs to the United States, wherever they may be.”
“Global criminal networks operate every day through drug trafficking and violence to assault the rule of law in the United States and around the world,” said Special Agent in Charge Donovan. “DEA and our foreign counterparts have worked tirelessly to ensure that Lorenzana-Cordon would spend a significant portion of his life in a U.S. prison cell for his crimes against our great country.”
The defendant was convicted on one count of conspiring to unlawfully distribute cocaine for illegal importation into the United States. As proven at trial, the defendant along with his brother, co-defendant Waldemar Lorenzana-Cordon, established himself as a leader of an international drug trafficking organization with close ties to the Sinaloa Cartel. Between 1996 and 2009, the defendant and his co-conspirators received, stored and distributed multi-ton quantities of cocaine from Colombia at their properties in Zacapa, Guatemala, for importation into Mexico and then ultimately into the United States. The cocaine delivered to the defendant’s properties during the course of the conspiracy arrived via extensive and varying means, including the use of go-fast boats, non-commercial light aircraft, and vehicles with hidden compartments. The defendant and his associates also used firearms during their criminal activity, and relied on threats of violence to promote their drug trafficking objectives.
On April 27, 2010, the Department of Treasury’s Office of Foreign Asset Control designated the defendant and his brother, Waldemar Lorenzana-Cordon, as Specially Designated Narcotics Traffickers pursuant to the Foreign Narcotics Kingpin Designation Act due to their significant roles in international narcotics trafficking and their ties to the Sinaloa Cartel.
The DEA’s 959/Bilateral Investigations Unit and Guatemala City Country Office led the investigation, which was supported by the Organized Crime Drug Enforcement Task Force program, the Criminal Division’s Office of International Affairs, the Chicago Police Department and the governments of El Salvador and Panama provided support and assistance. Finally, and in particular, the Justice Department wishes to convey its gratitude to the government of Guatemala for its steadfast commitment, collaboration and assistance in the investigation, extradition and prosecution of this case.
Trial Attorneys Michael Lang, Stephen Sola and Emily Cohen of the Criminal Division’s Narcotic and Dangerous Drug Section are prosecuting the case.
Las Vegas Man Sentenced to More Than 12 Years in Prison for Receipt of Child PornographyRead the Press Release
LAS VEGAS, Nev. – A Las Vegas man who was found guilty by a jury for receiving over 100 child pornography photos and 100 videos was sentenced today to 150 months in prison, announced U.S. Attorney Dayle Elieson for the District of Nevada, Special Agent in Charge Aaron C. Rouse for the FBI’s Las Vegas Division, and Sheriff Joseph Lombardo for the Las Vegas Metropolitan Police Department.
Frankie Allen Peraza, 39, was convicted last year of one-count of receipt of child pornography. In addition to the prison term, Peraza was sentenced to lifetime supervision and is required to register as a sex offender under the Sex Offender Registration and Notification Act. United States District Judge Andrew P. Gordon presided over the four-day jury trial and sentencing hearing.
According to the indictment and other court documents, in March 2013, a detective with the Las Vegas Metropolitan Police Department, in an undercover capacity, used a peer-to-peer file-sharing program and identified an IP address as advertising for sharing numerous file names indicative of child pornography. During an interview with Peraza, the IP address owner, he admitted that he downloaded child pornography. After a forensic examination, law enforcement found 110 photos and 110 videos of child pornography on devices belonging to Peraza.
The case was a joint investigation by the FBI and the Las Vegas Metropolitan Police Department. Assistant U.S. Attorneys Elham Roohani and Alexandra Michael prosecuted the case.
This case was brought as part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse. Led by U.S. Attorneys’ Offices and the Criminal Division’s Child Exploitation and Obscenity Section, Project Safe Childhood marshals federal, state and local resources to better locate, apprehend and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims. For more information about Project Safe Childhood and for information about internet safety education, please visit www.justice.gov/psc.
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Las Vegas Man Sentenced to 10 Years in Prison for Possession of A Stolen FirearmRead the Press Release
LAS VEGAS, Nev. – A convicted felon who carried a stolen 9mm handgun into an Alcoholics Anonymous meeting, then aimed the gun at a police officer was sentenced today to a total of 120 months in prison, announced U.S. Attorney Dayle Elieson for the District of Nevada.
Marcus Richard Thomas, 36, of Las Vegas, was sentenced today after previously pleading guilty to one-count of possession of a stolen firearm. United States District Judge Jennifer A. Dorsey presided over the sentencing hearing.
According to the plea agreement, Thomas admitted that, on March 31, 2017, he brought a stolen Glock 9mm firearm to an Alcoholics Anonymous meeting. When approached by law enforcement, Thomas aimed the firearm at the police officer, who in turn fired at Thomas, striking him. Thomas admitted that he knew the firearm was stolen.
The case was investigated by the Bureau of Alcohol, Tobacco, Firearms and Explosives. Assistant U.S. Attorney Phillip N. Smith Jr. prosecuted the case.
This case was brought as part of Project Safe Neighborhoods (PSN), a program bringing together all levels of law enforcement to reduce violent crime and make our neighborhoods safer for everyone. Attorney General Jeff Sessions has made turning the tide of rising violent crime in America a top priority. In October 2017, as part of a series of actions to address this crime trend, Attorney General Sessions announced the reinvigoration of PSN. For more information about PSN, visit www.justice.gov/usao-nv.
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Kansas Tax Return Preparer Pleads Guilty to Filing Fraudulent Tax ReturnsRead the Press Release
A Holcomb, Kansas, tax return preparer pleaded guilty today to filing a fraudulent income tax return and aiding and assisting in the preparation of fraudulent tax returns announced Principal Deputy Assistant Attorney General Richard Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Stephen R. McAllister for the District of Kansas.
According to documents and information provided to the court, Marcelino Almaraz owned Accounting Services, a business that provided tax preparation and other services. Almaraz admitted that he fraudulently sought to obtain refunds for individuals by including false filing statuses such as head of household and adding phony dependents in an effort to trigger and inflate child tax credits. Almaraz also admitted to falsifying his own income tax returns for 2010 and 2011 by underreporting his income. Almaraz agreed to pay $397,552 in restitution to the Internal Revenue Service (IRS) for the tax losses he caused.
U.S. District Court Judge Julie A. Robinson scheduled sentencing for May 14. Almaraz faces a statutory maximum sentence of three years in prison for each count. He also faces a period of supervised release, restitution and monetary penalties.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney McAllister commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorney John T. Mulcahy of the Tax Division and Assistant U.S. Attorney Jabari Wamble, who are prosecuting the case, and former Tax Division Trial Attorney Ryan R. Raybould, who previously worked on the case.
Additional information about the Tax Division’s enforcement efforts can be found on the division’s website.
KC Woman Sentenced for Obstruction of Justice After Forging Court Order for ReleaseRead the Press Release
KANSAS CITY, Mo. – Timothy A. Garrison, United States Attorney for the Western District of Missouri, announced that a Kansas City, Mo., woman who forged a court order to get another inmate released from prison, was sentenced in federal court today for obstruction of justice.
Margie P. Shephard, 53, of Kansas City, Mo., was sentenced by U.S District Judge Roseann Ketchmark to three years and five months in federal prison without parole.
Shephard was incarcerated as an inmate at Federal Prison Camp-Bryan in Bryan, Texas, after being sentenced to 10 years for conspiracy to commit bank fraud and identity theft, aggravated identity theft and obstruction of justice.
Shephard, who pleaded guilty on Aug. 3, 2017, admitted that, while incarcerated, she fabricated a document purporting to be an Amended Judgment in a Criminal Case for fellow inmate Leann Raejeana Turner of Blue Springs, Mo. Turner was also incarcerated at Federal Prison Camp-Bryan after being sentenced to three years in prison for her role in an $11 million mortgage fraud scheme. The fake court order, with a reduced sentence of 120 days of imprisonment for Turner (which would have resulted in her immediate release), included the forged signature of U.S. District Judge Greg Kays.
Shephard mailed the fake court order to her sister, who then faxed it to prison officials from a Sunfresh grocery store in Kansas City, Mo., on Nov. 9, 2014, and again on Nov. 28, 2014. The forged document raised suspicions because of the reduction of Turner’s sentence and typographical errors. Upon receiving the document, prison officials determined it was a forgery.
Shephard’s extensive criminal history includes 29 prior felony convictions (this offense is her 30th felony conviction) and 11 misdemeanor convictions, most of which involved fraudulent conduct. Twice while being held in lawful custody for a felony conviction, she escaped. Both times she was convicted of aggravated escape from custody.
This case was prosecuted by Assistant U.S. Attorney Rudolph R. Rhodes, IV. It was investigated by the FBI.
Justice Department Obtains over $2 Million for Servicemembers Who Terminated Their Motor Vehicle Leases with BMW Financial ServicesRead the Press Release
The Justice Department today announced that BMW Financial Services, N.A. (BMW FS) has agreed to pay over $2 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by failing to refund a type of up-front lease payment to 492 servicemembers who lawfully terminated their motor vehicle leases early. This is the first case brought by the Department involving a motor vehicle lessor’s failure to refund lease amounts to servicemembers who exercised their SCRA rights to terminate their leases.
The SCRA provides servicemembers with protections that permit them to terminate motor vehicle leases early without penalty after entering military service or receiving qualifying military orders for a permanent change of station or to deploy. When servicemembers lawfully terminate motor vehicle leases, the SCRA requires that they be refunded all lease amounts paid in advance.
BMW FS is a New Jersey-based auto financing company that provides auto leasing for customers of BMW, MINI, and Rolls-Royce. Individuals who lease vehicles from BMW FS, including servicemembers, often contribute an up-front monetary amount at lease signing, in the form of a cash payment, credit for a trade-in vehicle, or rebates or other credits. A portion of this up-front amount can be applied to the first month of the lease and certain up-front costs such as licensing and registration fees. The remainder, which is called the capitalized cost reduction (CCR) amount, operates to reduce the monthly payment the lessee must make over the term of the lease.
The Department received complaints from two servicemembers who were denied refunds of pre-paid CCR amounts by BMW FS. In October 2014, Kristi Steck, then a Senior Master Sergeant (SMSgt) in the U.S. Air Force stationed at Andrews Air Force Base in Maryland, leased a vehicle from BMW FS. Through the trade in of her previous car and a dealer rebate, she paid BMW FS an up-front CCR amount of approximately $4,000. SMSgt Steck made regular monthly lease payments for the next ten months. After receiving orders from the Air Force ordering her to relocate to Japan, SMSgt Steck terminated her lease. BMW FS refused to refund any of the $4,000 she paid when entering into the lease.
Similarly, in February 2015, Technical Sergeant (TSgt) A. Menard, who was also stationed at Andrews Air Force Base, leased a vehicle from BMW FS. TSgt Menard, through a trade in and rebate, paid an up-front CCR amount of approximately $5,000. After making regular monthly lease payments for seven months, TSgt Menard received orders from the Air Force to deploy to Afghanistan. BMW FS refused to refund Tsgt Menard any part of the $5,000 he had paid at the lease signing.
After learning about SMSgt Steck’s and TSgt Menard’s stories, the Department launched an investigation, which was handled jointly by the Department’s Civil Rights Division and the U.S. Attorney’s Office for the District of New Jersey. The Department’s investigation revealed that BMW FS had failed to refund any portion of the pre-paid CCR amounts to 492 servicemembers who had lawfully terminated their auto leases.
“We ask a great deal of those who serve our nation, including asking them to drop their affairs to deploy or serve in a new location, sometimes at a moment’s notice,” said Acting Assistant Attorney General John Gore of the Civil Rights Division. “Our men and women in uniform should be able to devote their entire energy to their service and defense of our nation, and the Justice Department is committed to protecting these rights when their obligations to the American people force them to change their plans.”
“The men and women who serve in the armed forces have made enormous sacrifices while selflessly protecting our nation from danger,” said U.S. Attorney Craig Carpenito. “We must honor their sacrifice by ensuring that their rights are protected when duty calls for their relocation or deployment overseas. Through this agreement, we are pleased that hundreds of service members will be compensated for the damages they suffered when they were not refunded pre-paid car lease payments after they were deployed.”
The agreement resolves a suit filed today by the United States in the United States District Court for the District of New Jersey. It covers all leases terminated by servicemembers since August 24, 2011.
The agreement requires BMW FS to refund to each servicemember portions of the pre-paid CCR amount based on how many days were remaining in the lease. In addition, BMW FS will pay indirect damages to each servicemember of three times the refund or $500, whichever is larger. The agreement requires BMW FS to deposit $2,165,518.84 into an escrow account to compensate the 492 servicemembers whose rights were violated under the SCRA. BMW FS also must pay $60,788 to the United States Treasury.
The agreement also requires BMW FS to revise its policies and procedures to ensure that servicemembers who terminate their auto leases early receive a full refund of all eligible pre-paid CCR amounts.
The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. The SCRA provides protections for servicemembers in areas such as evictions, rental agreements, security deposits, pre-paid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
Individuals who believe their civil rights have been violated may also file a complaint with the U.S. Attorney’s Office for the District of New Jersey at: http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or may call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.
Justice Department Obtains over $2 Million for Service Members Who Terminated Their Motor Vehicle Leases with BMW Financial ServicesRead the Press Release
NEWARK, N.J. – BMW Financial Services N.A. (BMW FS) has agreed to pay over $2 million to resolve allegations that it violated the Servicemembers Civil Relief Act (SCRA) by failing to refund certain up-front car lease payments to 492 service members who lawfully terminated their motor vehicle leases early, U.S. Attorney Craig Carpenito and Acting Assistant Attorney General John Gore of the Justice Department’s Civil Rights Division announced today.
This is the first case brought by the Justice Department involving a motor vehicle lessor’s failure to refund lease amounts to service members who exercised their SCRA rights to terminate their leases.
The SCRA provides service members with protections that permit them to terminate motor vehicle leases early without penalty after entering military service or receiving qualifying military orders for a permanent change of station or to deploy. When service members lawfully terminate motor vehicle leases, the SCRA requires that they be refunded all lease amounts paid in advance.
BMW FS is a New Jersey-based auto financing company that provides auto leasing for customers of BMW, MINI, and Rolls-Royce. Individuals who lease vehicles from BMW FS, including service members, often contribute an up-front monetary amount at lease signing, in the form of a cash payment, credit for a trade-in vehicle, or rebates or other credits. A portion of this up-front amount can be applied to the first month of the lease and certain up-front costs such as licensing and registration fees. The remainder, which is called the capitalized cost reduction (CCR) amount, operates to reduce the monthly payment the lessee must make over the term of the lease.
The Department received complaints from two service members who were denied refunds of pre-paid CCR amounts by BMW FS. In October 2014, Kristi Steck, then a Senior Master Sergeant (SMSgt) in the U.S. Air Force stationed at Andrews Air Force Base in Maryland, leased a vehicle from BMW FS. Through the trade in of her previous car and a dealer rebate, she paid BMW FS an up-front CCR amount of approximately $4,000. SMSgt Steck made regular monthly lease payments for the next 10 months. After receiving orders from the Air Force ordering her to relocate to Japan, SMSgt Steck terminated her lease. BMW FS refused to refund any of the $4,000 she pre-paid when entering into the lease.In February 2015, Technical Sergeant (TSgt) A. Menard, who was also stationed at Andrews Air Force Base, leased a vehicle from BMW FS. TSgt Menard, through a trade in and rebate, paid an up-front CCR amount of approximately $5,000. After making regular monthly lease payments for seven months, TSgt Menard received orders from the Air Force to deploy to Afghanistan. BMW FS refused to refund Tsgt Menard any part of the $5,000 he had paid at the lease signing.
After learning about SMSgt Steck’s and TSgt Menard’s stories, the Department launched an investigation, which was handled jointly by the U.S. Attorney’s Office for the District of New Jersey and the Department’s Civil Rights Division. The investigation revealed that BMW FS had failed to refund any portion of the pre-paid CCR amounts to 492 service members who had lawfully terminated their auto leases.
“The men and women who serve in the armed forces have made enormous sacrifices while selflessly protecting our nation from danger,” said U.S. Attorney Carpenito. “We must honor their sacrifice by ensuring that their rights are protected when duty calls for their relocation or deployment overseas. Through this agreement, we are pleased that hundreds of service members will be compensated for the damages they suffered when they were not refunded pre-paid car lease payments after they were deployed.”
“We ask a great deal of those who serve our nation, including asking them to drop their affairs to deploy or serve in a new location, sometimes at a moment’s notice,” said Acting Assistant Attorney General Gore. “Our men and women in uniform should be able to devote their entire energy to their service and defense of our nation, and the Justice Department is committed to protecting these rights when their obligations to the American people force them to change their plans.”
The agreement resolves a suit filed today by the United States in the U.S. District Court for the District of New Jersey. It covers all leases terminated by service members since Aug. 24, 2011.
The agreement requires BMW FS to refund to each service member portions of the pre-paid CCR amount based on how many days were remaining in the lease. In addition, BMW FS will pay indirect damages to each service member of three times the refund or $500, whichever is larger. The agreement also requires BMW FS to deposit $2,165,518.84 into an escrow account to compensate the 492 service members whose rights were violated under the SCRA. BMW FS also must pay $60,788 to the U.S. Treasury.
The agreement also requires BMW FS to revise its policies and procedures to ensure that service members who terminate their auto leases early receive a full refund of all eligible pre-paid CCR amounts.
The Department’s enforcement of the SCRA is conducted by the Civil Rights Division’s Housing and Civil Enforcement Section and U.S. Attorney’s Offices throughout the country. The SCRA provides protections for service members in areas such as evictions, rental agreements, security deposits, pre-paid rent, civil judicial proceedings, installment contracts, credit card interest rates, mortgage interest rates, mortgage foreclosures, automobile leases, life insurance, health insurance and income tax payments. For more information about the Department’s SCRA enforcement, please visit www.servicemembers.gov.
Service members and their dependents who believe that their rights under the SCRA have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations may be found at http://legalassistance.law.af.mil/content/locator.php.
Individuals who believe their civil rights have been violated may also file a complaint with the U.S. Attorney’s Office for the District of New Jersey at: http://www.justice.gov/usao-nj/civil-rights-enforcement/complaint or may call the U.S. Attorney’s Office’s Civil Rights Complaint Hotline at (855) 281-3339.
The government is represented by Assistant U.S. Attorney Michael E. Campion, Chief of the U.S. Attorney’s Office’s Civil Rights Unit, Civil Division; Assistant U.S. Attorney Christopher Amore, Civil Division; and Trial Attorney Alan Martinson, U.S. Department of Justice, Civil Rights Division, Housing and Civil Enforcement Section.
Justice Department Coordinates Nationwide Elder Fraud Sweep of more than 250 DefendantsRead the Press Release
BEAUMONT, Texas – Attorney General Jeff Sessions and law enforcement partners announced today the largest coordinated sweep of elder fraud cases in history. The cases involve more than two hundred and fifty defendants from around the globe who victimized more than a million Americans, most of whom were elderly. The cases include criminal, civil, and forfeiture actions across more than 50 federal districts. Of the defendants, 200 were charged criminally. In each case, offenders engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused losses of more than half a billion dollars. The Department coordinated its announcement with the FTC and state Attorneys General, who independently filed numerous cases targeting elder frauds within the sweep period.
Attorney General Sessions was joined in the announcement by FBI Acting Deputy Director David Bowdich; Chief Postal Inspector Guy Cottrell; FTC Acting Chairman Maureen Ohlhausen; and Kansas Attorney General and President of the National Association of Attorneys General Derek Schmidt.
“The Justice Department and its partners are taking unprecedented, coordinated action to protect elderly Americans from financial threats, both foreign and domestic,” said Attorney General Sessions. “Today’s actions send a clear message: we will hold perpetrators of elder fraud schemes accountable wherever they are. When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains. Today is only the beginning. I have directed Department prosecutors to coordinate with both domestic law enforcement partners and foreign counterparts to stop these criminals from exploiting our seniors.”
"Fraud directed at the elderly puts at risk the financial fruits of the labors of those who spent a lifetime improving our communities and our nation,” said Eastern District of Texas U.S. Attorney Alan R. Jackson. “They should be able to enjoy their hard earned savings without worrying about swindlers. It is important that we use all means at our disposal to bring con artists who target the elderly to justice.”
In the Eastern District of Texas, a 67-year-old Houston man, Lawrence Allen Deshetler, was sentenced on Nov. 6, 2017, to 60 months in federal prison and ordered to pay restitution to his victims. Deshetler, a certified financial planner and investment advisor, devised an investment scheme to defraud his victims, many of whom were elderly, of nearly $2 million.
In support of the Department's Elder Fraud Sweep, U.S. Attorney Jackson has assured the appointment of an Elder Justice Coordinator (EJC) for the Eastern District of Texas. The mission of the EJC is to serve as the district’s legal counsel on matters relating to elder abuse and to facilitate the prosecution of elder abuse cases. The EJC will work with our federal, state and local law enforcement partners to determine how best to efficiently and aggressively investigate and prosecute elder fraud cases and as well as how best to conduct community outreach. There is one EJC for each of the four federal judicial districts in Texas. All four EJCs have made preliminary coordination efforts with a view to combining efforts statewide where possible.
The actions charged a variety of fraud schemes, ranging from mass mailing, telemarketing and investment frauds to individual incidences of identity theft and theft by guardians. A number of cases involved transnational criminal organizations that defrauded hundreds of thousands of elderly victims, while others involved a single relative or fiduciary who took advantage of an individual victim. The schemes charged in these cases caused losses to more than a million victims.
“Winners. That’s what so many of the people who received these solicitations in the mail thought they were. But they’re not. They are victims of scams that Postal Inspectors have seen and investigated for decades. In fact, some of the same operators we encountered 20 years ago are back. But so are we. Yesterday, Postal Inspectors around the country executed search warrants on 14 locations that some of these same operators used to run their scams. We’re letting the American public know – and especially our vulnerable older Americans – that Postal Inspectors are working hard to protect them and ensure their confidence in the U.S. Mail,” said Chief Postal Inspector Cottrell.
“Over the last year, the FBI has initiated more than 200 financial crimes cases involving elderly victims who were devastated financially, emotionally, mentally and physically. Picking up the pieces of these fraud schemes can be equally as traumatizing for the caregivers of these elderly victims,” said Acting Deputy Director Bowdich. “The FBI reminds seniors and their caregivers to be vigilant. If any person believes they are the victim of, or have knowledge of fraud involving an elderly person, regardless of the loss amount, they should report it to the FBI.”
Actions against the Mass-mailing Fraud Industry
As part of the initiative, the Department’s Consumer Protection Branch, working with the U.S. Attorney’s Office for the Eastern District of New York and others, brought numerous cases this past week in a coordinated strike against more than 43 mass-mailing fraud operators, including criminal charges against six individuals. In addition, law enforcement agents executed 14 premises search warrants from Las Vegas to south Florida, served numerous asset seizure warrants, and coordinated with the Vancouver Police in Canada, who executed over 20 warrants, including search warrants on business premises.
“The defendants targeted elderly and vulnerable consumers both in the United States and abroad, using U.S. addresses and the U.S. mails to try to legitimize their fraudulent schemes,” said U.S. Attorney for the Eastern District of New York Richard P. Donoghue. “They sold false promises of life-changing prizes that never came true. We will pursue the perpetrators of these mail schemes wherever they are located, and hold them accountable.”
These recently filed cases particularly targeted transnational criminal actors who collectively defrauded at least a million victims out of hundreds of millions of dollars. Indeed, just one of the schemes prosecuted criminally by the Consumer Protection Branch operated from 14 foreign countries to cost American victims more than $30 million. Click here for map showing a transnational, single fraud scheme.
Mass-mailing fraud inflicts hundreds of millions of dollars in losses to elderly U.S. victims each year. Department prosecutors and U.S. Postal Inspectors have taken a comprehensive approach to combatting this fraud, disrupting and prosecuting individuals who manage the schemes, artists who draft the fraudulent solicitations, list brokers who supply victim lists, and individuals who collect victim payments.
Actions against other elder fraud schemes
Prosecutors across the country from the Criminal Division’s Fraud Section, the Consumer Protection Branch and the U.S. Attorney’s Offices have heeded the call to focus resources on elder fraud cases. Over 50 U.S. Attorney’s Offices and Department Components filed elder fraud cases in the last year. Some examples of the elder financial exploitation prosecuted by the Department include:
- “Lottery phone scams,” in which callers convince seniors that a large fee or taxes must be paid before one can receive lottery winnings;
- “Grandparent scams,” which convince seniors that their grandchildren have been arrested and need bail money;
- “Romance scams,” which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose;
- “IRS imposter schemes,” which defraud victims by posing as IRS agents and claiming that victims owe back taxes;
- “Guardianship schemes,” which siphon seniors’ financial resources into the bank accounts of deceitful relatives or guardians.
Many of these cases illustrate how an elderly American can lose his or her life savings to a duplicitous relative, guardian, or stranger who gains the victim’s trust. The devastating effects these cases have on victims and their families, both financially and psychologically, make prosecuting elder fraud a key Department priority.
Public Education
The Department has partnered with Senior Corps, a national service program administered by the federal agency the Corporation for National and Community Service, to educate seniors and prevent further victimization. The Senior Corps program engages more than 245,000 older adults in intensive service each year, who in turn, serve more than 840,000 additional seniors, including 332,000 veterans.
Using its vast network operating in more than 30,000 locations, Senior Corps volunteers will communicate about elder fraud to potential victims across the country and will use their skills, knowledge and experience to educate their peers and caregivers about the most prolific types of schemes and how to avoid them.
Coordination with state officials
Kansas Attorney General Schmidt highlighted the cases filed by state Attorneys General targeting elder frauds within in the sweep period, and he emphasized efforts at the state level to combat elder abuse and protect seniors from fraud and exploitation. He encouraged all of the state Attorneys General to devote enforcement and public education resources to preventing financial exploitation of senior citizens.
Coordination with foreign law enforcement
Exceptional assistance from foreign law enforcement partners amplified the effectiveness of the Department’s initiative. The sweep announced today benefited greatly from the work of the International Mass-Marketing Fraud Working Group (IMMFWG), a network of civil and criminal law enforcement agencies from Australia, Belgium, Canada, Europol, the Netherlands, Nigeria, Norway, Spain, the United Kingdom and the United States. The IMMFWG is co-chaired by the U.S. Department of Justice and FTC, and law enforcement in the United Kingdom, and serves as a model for international cooperation against specific threats that endanger the financial well-being of each member country’s residents. Attorney General Sessions expressed gratitude for the outstanding efforts of the working group, including law enforcement action taken as part of the sweep by the Vancouver Police Department in Canada to halt mass mailing schemes that defrauded hundreds of thousands of elderly victims worldwide.
Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime, which can be reached at www.ovc.gov.
Justice Department Coordinates Nationwide Elder Fraud Sweep of More Than 250 DefendantsRead the Press Release
WASHINGTON – Attorney General Jeff Sessions and law enforcement partners announced today the largest coordinated sweep of elder fraud cases in history. The cases involve more than two hundred and fifty defendants from around the globe who victimized more than a million Americans, most of whom were elderly. The cases include criminal, civil, and forfeiture actions across more than 50 federal districts. Of the defendants, 200 were charged criminally. In each case, offenders engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused losses of more than half a billion dollars. The Department coordinated its announcement with the FTC and state Attorneys General, who independently filed numerous cases targeting elder frauds within the sweep period.
Attorney General Sessions was joined in the announcement by FBI Acting Deputy Director David Bowdich; Chief Postal Inspector Guy Cottrell; FTC Acting Chairman Maureen Ohlhausen; and Kansas Attorney General and President of the National Association of Attorneys General Derek Schmidt.
“The Justice Department and its partners are taking unprecedented, coordinated action to protect elderly Americans from financial threats, both foreign and domestic,” said Attorney General Sessions. “Today’s actions send a clear message: we will hold perpetrators of elder fraud schemes accountable wherever they are. When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains. Today is only the beginning. I have directed Department prosecutors to coordinate with both domestic law enforcement partners and foreign counterparts to stop these criminals from exploiting our seniors.”
The actions charged a variety of fraud schemes, ranging from mass mailing, telemarketing and investment frauds to individual incidences of identity theft and theft by guardians. A number of cases involved transnational criminal organizations that defrauded hundreds of thousands of elderly victims, while others involved a single relative or fiduciary who took advantage of an individual victim. The schemes charged in these cases caused losses to more than a million victims.
“Winners. That’s what so many of the people who received these solicitations in the mail thought they were. But they’re not. They are victims of scams that Postal Inspectors have seen and investigated for decades. In fact, some of the same operators we encountered 20 years ago are back. But so are we. Yesterday, Postal Inspectors around the country executed search warrants on 14 locations that some of these same operators used to run their scams. We’re letting the American public know – and especially our vulnerable older Americans – that Postal Inspectors are working hard to protect them and ensure their confidence in the U.S. Mail,” said Chief Postal Inspector Cottrell.
“Over the last year, the FBI has initiated more than 200 financial crimes cases involving elderly victims who were devastated financially, emotionally, mentally and physically. Picking up the pieces of these fraud schemes can be equally as traumatizing for the caregivers of these elderly victims,” said Acting Deputy Director Bowdich. “The FBI reminds seniors and their caregivers to be vigilant. If any person believes they are the victim of, or have knowledge of fraud involving an elderly person, regardless of the loss amount, they should report it to the FBI.”
U.S. Attorney Shawn N. Anderson, Districts of Guam and the NMI, announced local outreach efforts to facilitate effective prosecutions that involve federal crimes against the elderly. The U.S. Attorney’s Office recently met with the Department of Public Health (DPHSS), Division of Senior Citizens and the Guam Coalition Against Sexual Assault & Family Violence, as part of an ongoing collaborative effort to raise awareness about the Department of Justice’s efforts.
Actions against mass-mailing fraud industry
As part of the initiative, the Department’s Consumer Protection Branch, working with the U.S. Attorney’s Office for the Eastern District of New York and others, brought numerous cases this past week in a coordinated strike against more than 43 mass-mailing fraud operators, including criminal charges against six individuals. In addition, law enforcement agents executed 14 premises search warrants from Las Vegas to south Florida, served numerous asset seizure warrants, and coordinated with the Vancouver Police in Canada, who executed over 20 warrants, including search warrants on business premises.
“The defendants targeted elderly and vulnerable consumers both in the United States and abroad, using U.S. addresses and the U.S. mails to try to legitimize their fraudulent schemes,” said U.S. Attorney for the Eastern District of New York Richard P. Donoghue. “They sold false promises of life-changing prizes that never came true. We will pursue the perpetrators of these mail schemes wherever they are located, and hold them accountable.”
These recently filed cases particularly targeted transnational criminal actors who collectively defrauded at least a million victims out of hundreds of millions of dollars. Indeed, just one of the schemes prosecuted criminally by the Consumer Protection Branch operated from 14 foreign countries to cost American victims more than $30 million. Click here for map showing a transnational, single fraud scheme.
Mass-mailing fraud inflicts hundreds of millions of dollars in losses to elderly U.S. victims each year. Department prosecutors and U.S. Postal Inspectors have taken a comprehensive approach to combatting this fraud, disrupting and prosecuting individuals who manage the schemes, artists who draft the fraudulent solicitations, list brokers who supply victim lists, and individuals who collect victim payments. Click here for fact-sheet on mass-mailing fraud sweep and cases.
Actions against other elder fraud schemes
Prosecutors across the country from the Criminal Division’s Fraud Section, the Consumer Protection Branch and the U.S. Attorney’s Offices have heeded the call to focus resources on elder fraud cases. Over 50 U.S. Attorney’s Offices and Department Components filed elder fraud cases in the last year. Some examples of the elder financial exploitation prosecuted by the Department include:
- “Lottery phone scams,” in which callers convince seniors that a large fee or taxes must be paid before one can receive lottery winnings;
- “Grandparent scams,” which convince seniors that their grandchildren have been arrested and need bail money;
- “Romance scams,” which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose;
- “IRS imposter schemes,” which defraud victims by posing as IRS agents and claiming that victims owe back taxes;
- “Guardianship schemes,” which siphon seniors’ financial resources into the bank accounts of deceitful relatives or guardians.
Many of these cases illustrate how an elderly American can lose his or her life savings to a duplicitous relative, guardian, or stranger who gains the victim’s trust. The devastating effects these cases have on victims and their families, both financially and psychologically, make prosecuting elder fraud a key Department priority.
Public education
The Department has partnered with Senior Corps, a national service program administered by the federal agency the Corporation for National and Community Service, to educate seniors and prevent further victimization. The Senior Corps program engages more than 245,000 older adults in intensive service each year, who in turn, serve more than 840,000 additional seniors, including 332,000 veterans.
Using its vast network operating in more than 30,000 locations, Senior Corps volunteers will communicate about elder fraud to potential victims across the country and will use their skills, knowledge and experience to educate their peers and caregivers about the most prolific types of schemes and how to avoid them.
Coordination with state officials
Kansas Attorney General Schmidt highlighted the cases filed by state Attorneys General targeting elder frauds within in the sweep period, and he emphasized efforts at the state level to combat elder abuse and protect seniors from fraud and exploitation. He encouraged all of the state Attorneys General to devote enforcement and public education resources to preventing financial exploitation of senior citizens.
Coordination with foreign law enforcementExceptional assistance from foreign law enforcement partners amplified the effectiveness of the Department’s initiative. The sweep announced today benefited greatly from the work of the International Mass-Marketing Fraud Working Group (IMMFWG), a network of civil and criminal law enforcement agencies from Australia, Belgium, Canada, Europol, the Netherlands, Nigeria, Norway, Spain, the United Kingdom and the United States. The IMMFWG is co-chaired by the U.S. Department of Justice and FTC, and law enforcement in the United Kingdom, and serves as a model for international cooperation against specific threats that endanger the financial well-being of each member country’s residents. Attorney General Sessions expressed gratitude for the outstanding efforts of the working group, including law enforcement action taken as part of the sweep by the Vancouver Police Department in Canada to halt mass mailing schemes that defrauded hundreds of thousands of elderly victims worldwide.
Elder fraud complaintsElder fraud complaints may be filed with the FTC at ReportFraud.ftc.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime, which can be reached at www.ovc.gov.
Justice Department Coordinates Nationwide Elder Fraud Sweep of More Than 250 DefendantsRead the Press Release
Attorney General Jeff Sessions and law enforcement partners announced today the largest coordinated sweep of elder fraud cases in history. The cases involve more than two hundred and fifty defendants from around the globe who victimized more than a million Americans, most of whom were elderly. The cases include criminal, civil, and forfeiture actions across more than 50 federal districts. Of the defendants, 200 were charged criminally. In each case, offenders engaged in financial schemes that targeted or largely affected seniors. In total, the charged elder fraud schemes caused losses of more than half a billion dollars. The Department coordinated its announcement with the FTC and state Attorneys General, who independently filed numerous cases targeting elder frauds within the sweep period.
Attorney General Sessions was joined in the announcement by FBI Acting Deputy Director David Bowdich; Chief Postal Inspector Guy Cottrell; FTC Acting Chairman Maureen Ohlhausen; and Kansas Attorney General and President of the National Association of Attorneys General Derek Schmidt.
“The Justice Department and its partners are taking unprecedented, coordinated action to protect elderly Americans from financial threats, both foreign and domestic,” said Attorney General Sessions. “Today’s actions send a clear message: we will hold perpetrators of elder fraud schemes accountable wherever they are. When criminals steal the hard-earned life savings of older Americans, we will respond with all the tools at the Department’s disposal – criminal prosecutions to punish offenders, civil injunctions to shut the schemes down, and asset forfeiture to take back ill-gotten gains. Today is only the beginning. I have directed Department prosecutors to coordinate with both domestic law enforcement partners and foreign counterparts to stop these criminals from exploiting our seniors.”
The actions charged a variety of fraud schemes, ranging from mass mailing, telemarketing and investment frauds to individual incidences of identity theft and theft by guardians. A number of cases involved transnational criminal organizations that defrauded hundreds of thousands of elderly victims, while others involved a single relative or fiduciary who took advantage of an individual victim. The schemes charged in these cases caused losses to more than a million victims.
"Winners. That’s what so many of the people who received these solicitations in the mail thought they were. But they’re not. They are victims of scams that Postal Inspectors have seen and investigated for decades. In fact, some of the same operators we encountered 20 years ago are back. But so are we. Yesterday, Postal Inspectors around the country executed search warrants on 12 locations that some of these same operators used to run their scams. We’re letting the American public know – and especially our vulnerable older Americans – that Postal Inspectors are working hard to protect them and ensure their confidence in the U.S. Mail,” said Chief Postal Inspector Cottrell.
“Over the last year, the FBI has initiated more than 200 financial crimes cases involving elderly victims who were devastated financially, emotionally, mentally and physically. Picking up the pieces of these fraud schemes can be equally as traumatizing for the caregivers of these elderly victims,” said Acting Deputy Director Bowdich. “The FBI reminds seniors and their caregivers to be vigilant. If any person believes they are the victim of, or have knowledge of fraud involving an elderly person, regardless of the loss amount, they should report it to the FBI.”
Actions against mass-mailing fraud industry
As part of the initiative, the Department’s Consumer Protection Branch, working with the U.S. Attorney’s Office for the Eastern District of New York and others, brought numerous cases this past week in a coordinated strike against more than 43 mass-mailing fraud operators, including criminal charges against six individuals. In addition, law enforcement agents executed 14 premises search warrants from Las Vegas to south Florida, served numerous asset seizure warrants, and coordinated with the Vancouver Police in Canada, who executed over 20 warrants, including search warrants on business premises.
“The defendants targeted elderly and vulnerable consumers both in the United States and abroad, using U.S. addresses and the U.S. mails to try to legitimize their fraudulent schemes,” said U.S. Attorney for the Eastern District of New York Richard P. Donoghue. “They sold false promises of life-changing prizes that never came true. We will pursue the perpetrators of these mail schemes wherever they are located, and hold them accountable.”
These recently filed cases particularly targeted transnational criminal actors who collectively defrauded at least a million victims out of hundreds of millions of dollars. Indeed, just one of the schemes prosecuted criminally by the Consumer Protection Branch operated from 14 foreign countries to cost American victims more than $30 million. Click here for map showing a transnational, single fraud scheme.
Mass-mailing fraud inflicts hundreds of millions of dollars in losses to elderly U.S. victims each year. Department prosecutors and U.S. Postal Inspectors have taken a comprehensive approach to combatting this fraud, disrupting and prosecuting individuals who manage the schemes, artists who draft the fraudulent solicitations, list brokers who supply victim lists, and individuals who collect victim payments. Click here for fact-sheet with cases on mass-mailing fraud.
Actions against other elder fraud schemes
Prosecutors across the country from the Criminal Division’s Fraud Section, the Consumer Protection Branch and the U.S. Attorney’s Offices have heeded the call to focus resources on elder fraud cases. Over 50 U.S. Attorney’s Offices and Department Components filed elder fraud cases in the last year. A list of Elder Fraud cases is provided on this interactive map.Some examples of the elder financial exploitation prosecuted by the Department include:
- “Lottery phone scams,” in which callers convince seniors that a large fee or taxes must be paid before one can receive lottery winnings;
- “Grandparent scams,” which convince seniors that their grandchildren have been arrested and need bail money;
- “Romance scams,” which lull victims to believe that their online paramour needs funds for a U.S. visit or some other purpose;
- “IRS imposter schemes,” which defraud victims by posing as IRS agents and claiming that victims owe back taxes;
- “Guardianship schemes,” which siphon seniors’ financial resources into the bank accounts of deceitful relatives or guardians.
Many of these cases illustrate how an elderly American can lose his or her life savings to a duplicitous relative, guardian, or stranger who gains the victim’s trust. The devastating effects these cases have on victims and their families, both financially and psychologically, make prosecuting elder fraud a key Department priority.
Public education
The Department has partnered with Senior Corps, a national service program administered by the federal agency the Corporation for National and Community Service, to educate seniors and prevent further victimization. The Senior Corps program engages more than 245,000 older adults in intensive service each year, who in turn, serve more than 840,000 additional seniors, including 332,000 veterans.
Using its vast network operating in more than 30,000 locations, Senior Corps volunteers will communicate about elder fraud to potential victims across the country and will use their skills, knowledge and experience to educate their peers and caregivers about the most prolific types of schemes and how to avoid them. Click here for information on Senior Corps’ efforts to reduce elder fraud.
Coordination with state officials
Kansas Attorney General Schmidt highlighted the cases filed by state Attorneys General targeting elder frauds within in the sweep period, and he emphasized efforts at the state level to combat elder abuse and protect seniors from fraud and exploitation. He encouraged all of the state Attorneys General to devote enforcement and public education resources to preventing financial exploitation of senior citizens.
Coordination with foreign law enforcement
Exceptional assistance from foreign law enforcement partners amplified the effectiveness of the Department’s initiative. The sweep announced today benefited greatly from the work of the International Mass-Marketing Fraud Working Group (IMMFWG), a network of civil and criminal law enforcement agencies from Australia, Belgium, Canada, Europol, the Netherlands, Nigeria, Norway, Spain, the United Kingdom and the United States. The IMMFWG is co-chaired by the U.S. Department of Justice and FTC, and law enforcement in the United Kingdom, and serves as a model for international cooperation against specific threats that endanger the financial well-being of each member country’s residents. Attorney General Sessions expressed gratitude for the outstanding efforts of the working group, including law enforcement action taken as part of the sweep by the Vancouver Police Department in Canada to halt mass mailing schemes that defrauded hundreds of thousands of elderly victims worldwide.
Elder fraud complaints
Elder fraud complaints may be filed with the FTC at www.ftccomplaintassistant.gov or at 877-FTC-HELP. The Department of Justice provides a variety of resources relating to elder fraud victimization through its Office of Victims of Crime, which can be reached at www.ovc.gov.